A shareholder is a person or organization that owns shares of a company. They can sell their shares for an income or receive dividends. They also have the option of voting on important decisions and be a part in corporate elections. They also have access to financial information about the company. But shareholders have certain duties to the company.
One of the primary duties is to ensure that the business adheres to corporate rules and regulations and doesn’t engage in illegal or unprofessional activities. This includes ensuring compliance with the regulations of regulatory bodies and observing tax laws. Another duty is to protect the interests of other stakeholders, such as employees and the public.
As a shareholder, you have the ability to take a variety of actions to assist your company in its success. For example, if the company is able to generate high-quality sales and has an excellent reputation, it will be able to attract more investors, which leads to higher profits for shareholders.
In smaller companies, shareholders are typically involved with day-to-day management decisions. This is not the case for larger companies where teams of managers make decisions. Major corporations tend to have a high number of shareholders. In some instances, these are related to the founders or other important individuals in the company, however in other instances, they are largely investors. Investors who invest a substantial proportion of the company’s shares are referred to as majority shareholders. These shareholders have significant power when it comes to making crucial operational decisions particularly when they hold more than half of the voting shares.