A shareholder is a person, or company that holds shares in the corporation, giving them a right to claim part of the company. Shareholders typically put their money in a company through the stock exchange or a mutual fund. They can also provide suggestions on how the business is run, or even hold an advisory position on the board. The importance of shareholders differs between companies and some shareholders have greater influence than others, depending on the nature of the business and the way it is run. Certain companies also reward their shareholders with dividends.

Democratize Finance for All

Shareholders are essential to any business since they are the owners of a portion of the company. This ownership stake is reflected by the financial performance of the company. When a company is doing well the value of its shares rises and shareholders are able to sell their shares and earn profits. If a company is performing poorly, the value of their shares will decrease and shareholders may lose their investment. In the end, it is important for investors to diversify their portfolios what are shareholders to protect themselves from large losses on one investment. Investors who purchase shares in an organization can enjoy various rights and responsibilities, ranging from voting on the appointing or removal of directors of the company to attending annual or extraordinary shareholder meetings. In some countries, shareholders can to request the shareholder register of a company to discover who is the owner of the company. This is often useful for advocacy because it can reveal the power of a particular group or individuals to influence the company’s decisions.