The Different Types of Shareholders in a Business

The different types of shareholders within a business are individuals or institutions that own shares of a company’s stock. Shareholders have various legal entitlements that allow them to vote on specific corporate issues as well as receive dividends and rights to the company’s assets when liquidating. Businesses of all sizes and sectors offer a variety of products and services. For example, Amazon sells a variety of items from books to kitchen appliances, whereas Apple is famous for its unique electronic gadgets including smartphones, personal computers headphones, and watches.

There are two kinds of shareholders: common and preferred. Common stock holders hold a portion of ownership of the company and are entitled to voting privileges and a share of profits (if there are any). In general, this type of share is more likely to earn a higher return over the longer term however, it is not guaranteed a specific yearly dividend. Common stockholders have the right to examine company records, such as shareholder lists and minutes of meetings.

Preferred shareholders are guaranteed a annual dividend, and they also have priority over common stockholders if liquidating the company’s assets. They are unable to vote for the board members or any other policies of the company. The term “shareholders” is synonymous with “stakeholders,” but stakeholders have a wider definition that http://companylisting.info/2021/04/15/how-to-register-a-business-name/ includes customers and employees, as well as suppliers and local communities. Shareholders are directly invested in the performance of a business.