February 24, 2024

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shareholders

A shareholder or stockholder is an individual or institution (including a corporation) that legally owns a share of stock in a public or private corporation. Shareholders are the owners of a limited company. They buy shares which represent part ownership of a company. Stockholders are granted special privileges depending on the class of stock. These rights may include: The right to sell their shares. The right to vote on the directors nominated by the board. The right to nominate directors (although this is very difficult in practice because of minority protections) and propose shareholder resolutions. The right to dividends if they are declared. The right to purchase new shares issued by the company. The right to what assets remain after a liquidation. Stockholders or shareholders are considered by some to be a subset of stakeholders, which may include anyone who has a direct or indirect interest in the business entity. For example, employees, suppliers, customers, the community, etc., are typically considered stakeholders because they contribute value and/or are impacted by the corporation. Shareholders in the primary market who buy IPOs provide capital to corporations; however, the vast majority of shareholders are in the secondary market and provide no capital directly to the corporation.

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