Shareholder

A shareholder, also known as a stockholder, is any person, company, or institution that owns at least one share of a company's stock. Shareholders are the owners of a company, and their rights and responsibilities vary depending on the type and amount of stock they hold. Shareholders can be classified into different categories. Individual shareholders are everyday investors who buy stocks through brokerage accounts. Institutional shareholders include entities like mutual funds, pension funds, insurance companies, and hedge funds that invest large sums of money on behalf of their clients. Common shareholders typically have voting rights, allowing them to participate in corporate governance by voting on important matters such as electing the board of directors, approving mergers and acquisitions, and making changes to the company's charter. Most companies follow a one-share, one-vote policy, meaning shareholders with more shares have more influence. Shareholders may also receive dividends, which are distributions of company profits. When a company generates excess cash, it can choose to reinvest in the business or distribute some portion to shareholders as dividends. Not all companies pay dividends - many growth companies prefer to reinvest all profits back into the business. In the event of bankruptcy, shareholders have a claim on company assets, but they're last in line after bondholders and other creditors. This means shareholders bear the highest risk but also have the potential for the greatest returns through stock price appreciation. Being a shareholder means you have a vested interest in the company's success. When the company performs well, the stock price typically rises, increasing the value of your investment. Understanding your rights and responsibilities as a shareholder is crucial for making informed investment decisions.