The Different Types of Shareholders in a Business

The various types of shareholders in a business are institutions or individuals who hold shares of a company’s stock. Shareholders are entitled to many legal rights, including the right to vote on corporate matters, to receive dividends, and be able to claim assets in liquidation. The different kinds of company development tips businesses around the world provide various items and services that vary by industry and size. Amazon for instance, sells everything from books to kitchen appliances. Apple is known as a manufacturer of innovative electronic devices, including smartphones, watches, earphones, and personal computers.

There are two kinds of shareholders in general two types of shareholders: preferred and common. Common stock holders enjoy a partial ownership of the company and are entitled to voting rights and a share of profits (if they have any). This kind of share typically has higher returns over the long-term, but may not be able to guarantee a regular dividend. Common stockholders have the right to inspect company records, such as the minutes of meetings and shareholder lists.

Preferred shareholders receive an annual dividend that is guaranteed and have priority over other stockholders in the case of liquidating assets. They are not able to vote on the board members or any other policies of the company. The term “shareholder” can be used interchangeably with the phrase “stakeholder,” but stakeholder is a more broad term which includes employees, customers and local communities, while shareholders directly invest in the company’s performance.