A shareholder is a person or a company that owns shares of an enterprise. They have the ability to vote on major decisions taken by the company. They can also earn a profit by gaining value on their portfolio or from dividend payments. The rights and duties of shareholders are based on the number of shares they hold, and they may be classified into categories like majority and minority shareholders.
The person who owns more than 50% of a business’s shares is known as a majority shareholder. It is usually the company’s founders, but it can also be an organization that purchases more than 50 percent of the shares in a business. A majority shareholder has the power to vote on major decisions, and can choose the members of a company’s board. They also have the power to bring lawsuits against an organization for any wrongdoing committed by it.
If you own more than 25% of the company’s shares, you’re a minority shareholder. You have the right to vote on important decisions but don’t have a lot of control over the company. Minority shareholders can still be able to sue the company in the event that it is found guilty of any wrongdoing, however they don’t have the same power as majority shareholders.
There are two types of shareholders preferred and common shareholders. Both types of shareholders are entitled to vote on key decisions and choose who is on the board of directors, however the type of shares you own determines your voting rights. Common shareholders have the most amount of votes and are entitled to receive dividends if the company earns a profit in the fiscal year, however they do not receive an assured rate of dividend payment as preferred shareholders do.