Shareholder

A shareholder is technically often referred to as a member (sometimes called a stockholder) is a person, company, or other organisation that holds one or more shares of a limited company’s stock, known as equity. Shareholders are essentially part-owners of the company they own stock in, and as such, they reap benefits from the business’s success, such as dividends (a share of the profits) and increased stock valuations. On the other hand, if the business loses money, the shareholders stand to lose money or suffer a reduction in their portfolio’s value as the share price drops. Shareholders also have certain rights within the business such as voting during shareholder meetings to approve or disapprove the board of directors, business mergers, and proposed dividend distributions. Shareholders can rightfully collect leftover proceeds after a company’s assets are liquidated, however, bondholders, creditors, and preferred stockholders have priority over common stockholders, who may get nothing. In England and Wales shareholders are the parties who appear in the company register of members, a requirement for every company in accordance with s.113 Companies Act 2006.