Institutions or individuals who have shares in a corporation are the different types of shareholders. Shareholders are entitled to various rights that permit them to participate in voting on corporate matters as well as receive dividends and a claim on the company’s assets in the event of liquidation. Companies of all sizes and industries offer a variety of products and services. For example, Amazon sells a variety of items from books registering your business name to kitchen appliances, while Apple is known for its innovative electronic gadgets such as smartphones, personal computers or earphones.
There are two types of shareholders in general the two categories of common and preferred. Anyone who owns common stock has partial ownership of the company This means they are entitled to vote rights as well as part of the company’s earnings (if there is profit). In general, this type of stock has higher rates of return over a long period but may not guarantee the exact amount of a dividend each year. Common stockholders also have the option to examine the company’s records like shareholder registers and minutes of meetings.
Preferred shareholders receive a yearly dividend, and they also have the advantage over common stockholders should they liquidate the company’s assets. However, they cannot vote on board members or other policies of the company. The term “shareholders” is synonymous with “stakeholders,” but stakeholders have a wider meaning that includes employees and customers as well as suppliers and local communities. Shareholders directly invest in the profitability of a company.
