The Different Types of Shareholders in a Business

The different types of shareholders in a company are individuals or institutions that have shares of the company’s stock. Shareholders are entitled to various legal rights such as the right to vote on corporate matters, receive dividends, and take advantage of assets in a liquidation. Businesses of all sizes and sectors offer a variety of goods and services. Amazon is one example. It sells registering your business name everything from kitchen appliances to books. Apple is known as an innovator in electronic devices such as smartphones, watches, earphones, and personal computers.

There are two kinds of shareholders the two categories of common and preferred. Common stock owners have a limited ownership of the company and are entitled to voting privileges and a percentage of profits (if any). This type of share typically has higher returns over the long term, but does not be able to guarantee a regular dividend. Common stockholders have the right to inspect company records, including shareholder lists and minutes of meetings.

Preferred shareholders receive a guaranteed annual dividend and are entitled to precedence over other stockholders the event of liquidating assets. They are however not able to vote on board members and other policies of the company. The term “shareholder” is often used interchangeably with “stakeholder,” but stakeholder has a wider definition that includes employees, customers, suppliers and local communities, while shareholders directly contribute to the company’s performance.