What is Shareholder?

A shareholder is a natural or legal person who owns one or more company shares in the stock market. Therefore, that ownership will grant the status of owner and partner.

Your responsibility and decision-making power of the company will be given in proportion to the number and type of shares you own.

Being a shareholder will imply having a set of related to the acquisition with the property title.

The shareholder can be an average person, as a procedure of their equity, or a legal person, any company, organization, or entity with a business interest among its assets.

Responsibility of Shareholder

Apart from the capital contribution, certain ancillary benefits can establish, contemplated in article 86 et seq. of the LSC.

These benefits cannot integrate the capital stock and typically constitute obligations to do or not to do on the part of the shareholders.

When this type of ancillary benefit exists in a limited company, it will be essential to establish its regime in its bylaws.

Being a shareholder of a company entails a series of obligations or considerations of the company’s personality. Generally, these duties include in the statutes to be reviewed by people publicly.

Rights of Shareholder

Rights of Shareholder
The rights that shareholders have can be economical or management:

Concerning economic rights, we will have the power to receive dividends, freely sell the shares and even receive part of the company’s value if it is sold in an acquisition action by another.

Concerning management rights, it refers to decision-making, such as the right to vote and access to company information to know its situation.

The digit of shares that a shareholder owns will be directly proportional to the number of votes that he may exercise; the greater the number of shares, the greater the possibility of participating in its administration and decision-making.

The shareholder has possession of shares in which the company divided. This brands you a companion while allowing you to decide in the management and decision-making bodies.

The company’s ownership that corresponds to a shareholder is based on the number of shares that it has over the total in which the capital of the same divided. Having part of that capital confers several rights and obligations of a political and economic-financial nature.

Naturally, there are some types of shares and, therefore, of shareholders. Some examples are the non-voting shareholder, minority shareholders, and shareholders of the Shareholders’ Meeting. In this way, we have several rights and privileges to fill the gaps or responsibilities arising from each condition.

Fundamental Rights of the Shareholder

Among the fundamental rights of the shareholder are the following:

  • Due to the dividend: To receive the proportional part of the company’s profits.
  • Preferential subscription right: Over shares when capital increases carry out.
  • Right to liquidation quota: In the case of liquidation of the company’s assets based on its, participation quota.
  • Right to information: On the situation and state of the volumes.
  • And attend and vote: At General Stockholders conferences. The right to form a portion of the company’s government and vote on conclusions.

In this way, by keeping part of a company’s capital, a shareholder can partake in the decision-making of political switch in the Board of Directors. In total, he can also join in the company’s profits and respond with the wealth in case of losses and insolvency of the company.

A shareholder is a person who owns one or more shares in a company. Shareholders are referred to as investors since buying a share represents an investment (a capital outlay).

In this sense, it is vital that we also clarify what an action is. Thus, we can establish that it is each of the proportional parts into which the capital of a corporation divide, whether it is commercial or industrial.

For this same reason, a shareholder is a capital partner involved in the company’s management. His responsibility and decision-making power depend on the percentage of capital he contributes to it (the more shares, the more votes).

It is also important to establish two different types of shareholders. In this way, in the first place, we find the so-called reference shareholders. These those characterized by the fact that they have a significant number of shares, which is what determines and makes it clear that they intervene and influence the management of the company itself is.

Shareholder of a Company

All company shareholders have rights and obligations once they are owners of company shares.

The usual thing is that the shareholder has committed to participation in the company. It contributes money for its operation and takes care of its management first. However, some shareholders delegate management tasks, only collecting the dividends.

The latter is usually the most common cause of people. and who buy shares of companies on the stock market. They believe claims with the hope of making a profit from it, but without ever becoming a participant in its management.

What Rights Does a Shareholder Have Over the Company?

Owning a percentage of the company carries with it at least two types of rights:

  • Economic rights.
  • Management rights.

Economic rights imply the following:

  • The receipt of dividends in proportion and according to the General Meeting of Shareholders.
  • In case of liquidation of the company, the shareholder has the right to receive a percentage of it.
  • The possibility of selling those shares to other savers, always following the company’s bylaws.
  • Management rights entail the right to vote in the company’s decisions and obtain information about its management.

These rights are generally set out in the company’s statutes.

Conclusion

A shareholder is a natural or legal person who is the permanent or temporary owner of shares of any corporation within the legal framework.

By having shares within a company, the shareholders acquire its patrimonial and political rights. By possessing company resources, they own a part of it by investing, for which they receive economic contributions in exchange.

Shareholders are crucial in forming a company since, through their help and mentoring, the possibility that a business can grow exponentially is greater.

Also Read: Accounting – Definition, Origin, Types, Objective, Basics and More

Review What is Shareholder? – Responsibility, Rights and More.

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