What is a shareholder?
Anyone who owns at least one share in a business or company. A controlling shareholder owns more than half of a company's shares, while a minority shareholder owns fewer than half.
If you work for a private company, it will have shareholders. If you own a private limited company , you will be a shareholder. Shareholders can be individuals, groups of people, a partnership or an organisation.
Shareholders give a business financial security, receive a portion of its profits and oversee how the directors manage the company. A shareholder's influence over a business is typically aligned with the percentage of shares they own.
Where have you heard about shareholders?
Shareholders are frequently referred to in the media, particularly when companies hold their Annual General Meetings (AGMs). This is an opportunity for shareholders to hold their company's directors to account, especially on ethical or business performance issues.
What you need to know about shareholders...
Shareholders can appoint and remove directors, set their salaries and grant them powers. A shareholder may also be a director.
Shareholders contribute to company debt up to their liability limit. So if a shareholder owns 10% of a company, they are liable for 10% of the debt.
In a limited liability company, shareholders are not usually liable personally for a company's debts, but they may lose what they invested in the business.