Shareholder

Shareholders provide capital to companies by buying shares, either when the company issues them or from other investors on a stock exchange. In return, they own a portion of the company and share in its success through dividends and rising share prices. They also bear the risk of losses if the company does poorly.

Ordinary shareholders usually have voting rights, typically one vote per share, allowing them to elect directors and approve major decisions at general meetings. Preferred shareholders often have priority for dividends but limited voting rights.

For example, an investor who buys 100 shares of a company with 10,000,000 shares outstanding owns 0.001% of the company and receives that share of any dividends paid.

Shareholders’ liability is usually limited to the amount they invested, so they cannot lose more than they put in. If a company fails, shareholders are paid last, after creditors, and often receive nothing. In the United States, the term stockholder is also common. Shareholders are one type of stakeholder, alongside employees, customers, suppliers and communities.