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Share Holders |
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A shareholder is a person who owns a share of the dividends of the business run by a person or by a company. A company can also be a shareholder if the company holds the ownership of a share in the stock. In this case, the stock should be of a joint stock company. So, evidently, the share holders of a company are the joint owners of the company.
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The share holders are let to have special privileges in some cases. But the types and extent of the privileges that the share holders enjoy, depend very much on the class of the stock. When the election is held with the purpose of electing the members of the board of directors of the company or for the particular business, the share holders are given the right to vote so that he or she can express his or her preferences. The share holders or the stockholders, as they are often referred to, also have the right to propose some solutions to get the company out of crisis, if there is any. These suggestions offered by the share holders are called the shareholder resolutions.
The share holders of a company enjoys many other rights. Being the share holders, they automatically have the right to get the share in the annual dividends of the company. If the company issues new shares, the existing share holders also get the right to purchase a share. If the company goes through a liquidation, the share holders of that company have the right to the assets of the company. Though the creditors of the company have more right to the assets of the company, and the rights of the share holders to the assets of the company are subordinate to the creditors' right to the company assets, the right of the share holders cannot be ignored in any way.
There are some suggestions or opinions according to which the share holders or the stockholders are the partial subset of the stakeholders. There is a very interesting advantage enjoyed by the share holders. The officers of a company or the directors of the company have to look after the best interests and the welfares of the share holders. They are bound to do so by the fiduciary duties. But, on the other hand, the share holders are, in no way, bound by any bondage or any duty.
Though the share holders are not bound by any of such duties, the courts are willing to enforce such duties on the share holders. If this is enacted, it will be for rare cases which are generally unusual. One example of the share holders being imposed with a duty is to be found in California. The majority share holders of the corporations in California, are bound to take care of the fact that they will not anyway destroy the share values of the minority share holders.
The exchange- traded funds that are managed passively, and the mutual funds happen to be the largest share holders in general.
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