what is Shareholder

A shareholder, as defined by the relevant literature, is an individual or entity that owns one or more shares in a company or a mutual fund, thereby becoming a partial owner of the corporation. Here are the key aspects that define the role and responsibilities of a shareholder: 1. **Ownership and Rights**: Shareholders have a stake in the company and are entitled to a portion of its profits, which may come in the form of dividends. They also have the right to vote on critical corporate matters, such as electing the board of directors. 2. **Types of Shareholders**: There are typically two types of shareholders: common and preferred. Common shareholders own common stock and have voting rights, while preferred shareholders own preferred stock, receive fixed dividends, and typically have no voting rights. 3. **Shareholder Influence**: The influence of shareholders on the business is determined by the shareholding percentage owned. Majority shareholders, often company founders, have more control and decision-making power compared to minority shareholders. 4. **Shareholder Responsibilities**: Shareholders are not just passive owners; they have certain responsibilities, such as making decisions on company matters when directors have no power over them and checking and approving the company's financial statements. 5. **Shareholder Liabilities**: Shareholders' liabilities are generally limited, meaning they are not personally responsible for the company's debts and liabilities. In summary, shareholders play a crucial role in the governance and decision-making processes of a company, and their rights and responsibilities are determined by the type of shares they hold and the company's constitution.