Individuals or institutions that own shares in a company are the different types of shareholders. Shareholders have a variety of legal rights that include the right vote on corporate issues, receive dividends and take advantage of assets in a liquidation. The different kinds of businesses in the world offer a wide range of items and services that vary by industry and size. Amazon, for example, sells everything from books to kitchen equipment. Apple is known as a manufacturer of innovative electronic devices, such as headphones, watches, smartphones and personal computers.
There are two types of shareholders the two categories of common and preferred. Common stock holders hold a portion of ownership of the company and are entitled to voting rights and a share of profits (if there are any). This kind of share typically offers higher returns over the long run, but it may not guarantee an annual dividend. Common stockholders have the right to examine company records, such as shareholder lists and meeting minutes.
Preferred shareholders are guaranteed a annual dividend, and they also have an advantage over common stockholders when liquidating the company’s assets. However, they are not allowed to vote on board members or other company policies. The term “shareholder” can be used interchangeably with “stakeholder,” but stakeholder is a broad term that includes customers, employees, suppliers and local communities, while shareholders directly contribute to the profitability of a company.