A shareholder is any person, company or institution that holds an interest in a corporation. When they own shares, shareholders are granted a claim to a portion of a company’s earnings as well as equity, usually in the form of dividends. The shares also allow them to vote on vital corporate decisions. These voting rights are typically proportional to the number of shares owned. Legal rights and obligations for shareholders may differ based on the constitution or shareholder agreement of a particular company. It’s important to carefully study these documents prior to investing in shares.

Anyone who holds a large amount of common stock could have a big impact on the direction of a company and could be in a position to negotiate with potential acquisition companies. They also be able to nominate and approve board members, and to vote on vital issues like whether the merger is approved or not.

Shareholders also have the ability to sue a company for misconduct. As owners of the shares, shareholders have the right to view financial documents including the company’s books and records and are able to initiate legal action if they are unable to rectify wrongful actions of the company, the board members, and executive officers.

Stakeholders are those who www.boardportalpro.org/what-are-shareholders have a direct stake in the success of a corporation such as employees who wish to see their pay increase as well as suppliers who wish to have to have a steady customer and customers who are looking for high-quality goods and services. Nonfinancial stakeholders can be a larger group of people that is benefited or harmed from the company’s operations like local economies, politicians whose campaigns depend on the success of their economy and tax revenue for cities that is often dependent on business activity.