Who is Shareholder?
A shareholder, whether an individual or an entity such as a company or organization, represents ownership of stocks within a specific company. Participation in the stock market automatically entails this status, commonly referred to as a shareholder or a stockholder.
Since the shareholders are the owners of some part of the company, they have certain privileges and responsibilities. These shareholders are authorized to participate in voting processes related to company decisions and are eligible to receive dividend payments during periods of beneficial financial performance.
In other words, a shareholder is someone who occupies a share of the company's stock. As long as this ownership is in place, the shareholder is given specific rights and responsibilities defined by the corporation's articles of incorporation and bylaws, as governed by the law. The scope of shareholder rights is broad, including attendance at shareholders' meetings, participation in proxy elections, access to corporate records, inspection of the company's premises, receipt of notices regarding stockholder meetings, and entitlement to dividend payments.
How does shareholder work?
A majority shareholder is an entity that holds more than 50 percent of a company's outstanding shares and, I.e., holds considerable authority in influencing vital decisions concerning the company's operations. On the contrary, entities with ownership of less than 50% of a company's shares are known as minority stockholders.
Generally, the majority of stockholders are the company's founders or their descendants. Owning over 50% of a company's shares implies control over an equivalent percentage of the company's voting rights. Consequently, majority stockholders are pivotal in executing critical decisions, such as appointing or replacing board members and key personnel like chief executive officers.
Although majority shareholders play a vital role in a company's decision-making process, they are not personally responsible for the company's financial obligations or debts. Therefore, unlike partnerships or sole proprietorships, a shareholder's personal assets remain safeguarded even if the company faces insolvency