Institutions or individuals who own shares in a business are the different types of shareholders. Shareholders have different legal rights that allow them to vote on specific corporate issues, receive dividends and have an interest in the company’s assets when liquidating. The various types of businesses in the world offer many different products and services that vary according to industry and size. Amazon for instance, sells everything from books to kitchen gadgets. Apple is known as a maker of cutting-edge electronic devices, including phones, watches, earphones and personal computers.
There are two kinds of shareholders in general the two categories of common and preferred. Common stock holders have partial ownership of the company and have voting rights and a percentage of profits (if there is any). This type of stock typically provides higher returns over the long term, but does not guarantee an annual dividend. Common stockholders have the right to access the company’s records, including the minutes of meetings and shareholder lists.
Preferred shareholders receive a yearly dividend and also have the advantage over common stockholders in the event of liquidating the company’s assets. They are however not able to vote on board members and other company policies. The term “shareholder” is often used interchangeably with “stakeholder,” but stakeholder is a more broad term that includes employees, customers, suppliers and local communities and shareholders are directly invested in the company’s performance.
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