May 26, 2024

A group of people who own a part of a business is called a shareholder. They are entitled to vote on key company decisions, and also receive dividends from the company. They are interested in the growth and success of a company, in order that their stock value will increase. However, not all shareholders are created equal, and they have different roles within an organization.

Common shareholders are more popular because they can trade their shares on a public stock exchange, and are much easier to acquire. They represent the majority of a company’s shareholders and have the right to vote on certain decisions like choosing candidates for the board of directors, changes in the company’s structure, etc. They have the right also to inspect the financial reports and other documents of the company. When a company liquidates, common shareholders can claim their assets following the settlement of debts.

Preferred shareholders own shares that have a higher value over other assets of the company in the case of liquidation. They can claim the assets of a firm after the other shareholders have been paid which is why they are less risky for investors. They are usually made up of institutional and private investors.

Activist shareholders are individuals who purchase shares in the hope of interfering in corporate governance and management decisions. They might request more dividends or corporate reorganization in order to increase the value of their shares. They are typically found in family-owned businesses, as they own the company and take care to not to overstep their boundaries or conflict with other owners.

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