The concept of Shareholders refers to a person, company, or organization that owns at least one share of a company’s stock, so that the shareholder essentially has a right in this company and can reap profits if the business succeeds, and it is possible to obtain these profits as an increase in the value of the stock or from the distribution of profits by disbursing them financially. If the company loses, the shareholders lose money or a decrease in the total value of their investment portfolios. critical decisions related to the operation of the company’s activities, while individuals who own less than 50% of the total stocks are referred to as minority shareholders.
Duties of the shareholder
The shareholder is entrusted with many tasks and duties, as is the case with other company employees, which he must perform to the fullest extent to ensure the company achieves profits and its continuity, which is directly related to the reflection of this on the profits of the value of stocks for shareholders, in addition to the financial profits they obtain, and in The following is a description of the most important of these tasks:
- Brainstorming with other shareholders and determining the powers that will be granted to managers within the company, in addition to appointing or removing them when needed.
- Determining the amount of salary received by the members of the board of directors, so that these salaries must be appropriate to the standard of living compared to the price levels in the state.
- Making important decisions related to matters that the authority’s managers do not have the power to interfere in, such as changing the company’s internal law and general policies.
- Auditing and approving the company’s financial statements, including financial statements, tax returns, and others.
- Providing financial support to the company in exchange for potential profits over the life of the company.
Shareholder’s rights
Shareholders traditionally enjoy many rights that may constitute a kind of distinction for them from the directors and officers of the company, and some of these rights can be summarized through the following:
- The right to receive profits from the company in which they invest, either through dividends or through the increase in the value of stocks and the ability to sell them.
- The right to obtain the net returns of the company in which they invest, in the event of its suspension, dissolution or collapse.
- They have the right to vote on work-related matters and decisions to be taken, including holding elections for the board of directors, but they do not have the right to vote on executive decisions.
- The right to see account statements, tax returns, etc.
- The right to sue the company in the event of violations by managers or employees.
- Right of ownership and transfer of ownership.
- The right to attend annual meetings.
- The right to demand a fair and proportional distribution of proceeds in the event the company liquidates its assets.
Types of Shareholders
The classification of shareholders varies according to ownership, control, etc., and these types can be clarified through the following:
Owner’s shareholder
This type refers to the shareholders who own stocks in the company, and their powers depend on the size of the stocks they own in addition to the type of contribution. These types of shareholders are entitled to receive various rewards and privileges, and they can also return purchase orders, and they have the right to vote on important decisions For example, in the event that there is a decision related to the amount of debt or if there is a person who is not suitable for his position in the company, the shareholders can meet and take the opinion of the majority to take the appropriate decision through their powers available to them.
Preferred shareholder
This type of shareholder represents individuals or entities who do not own stocks that entitle them to vote in the decisions of the company or the work of the management, and they are shareholders who can receive dividends before the owners of the shareholders. That is, the preferred shareholders and bondholders are paid in the beginning before anyone, and can be considered These shareholders have fixed profits, and in the event of the company’s liquidation, they are entitled to receive amounts from the company’s assets before the ordinary shareholders and after the bond holders.
Shareholder bond holders
This type of shareholder refers to the individuals or creditors of the company, and they are a class completely different from ordinary shareholders. They do not have the right to vote on decisions, and instead of receiving profits, they get interest rates from the company, which are paid at a fixed rate, and as in the case of The preferred shareholder gets the interest or the proceeds early.
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