Shareholder
A
shareholder or
stockholder is an
individual or
company (including a
corporation) that legally owns one or more
shares of
stock in a
joint stock company. The shareholders are the owners of a corporation. Companies listed at the
stock market strive to enhance
shareholder value.
Stockholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned) on matters such as elections to the
board of directors, the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a
liquidation of the company. However, stockholder's rights to a company's assets are subordinate to the rights of the company's creditors. This means that stockholders typically receive nothing if a company is liquidated after
bankruptcy (if the company had had enough to pay its creditors, it would not have entered bankruptcy), although a stock may have value after a bankruptcy if there is the possibility that the debts of the company will be restructured.
Stockholders or shareholders are considered by some to be a partial
subset of
stakeholders, which may include anyone who has a direct or indirect equity interest in the
business entity or someone with even a non-pecuniary interest in a
non-profit organization. Thus it might be common to call
volunteer contributors to an
association stakeholders, even though they are not shareholders.
Although directors and officers of a company are bound by
fiduciary duties to act in the best interest of the shareholders, the shareholders themselves normally do not have such duties towards each other.
However, in a few unusual cases, some courts have been willing to imply such a duty between shareholders. For example, in
California, majority shareholders of closely held corporations have a duty to not destroy the value of the shares held by minority shareholders. See
Jones v. H. F. Ahmanson & Co., 1 Cal. 3d 93 (1969) [
1].
The largest shareholders (in terms of percentages of companies owned) are often mutual funds, and especially passively managed
exchange-traded funds.
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Corporate governance*
stock*
stock investor
