Shareholders
Shareholders or stockholders own parts or shares of companies. In large corporations, shareholders are people and institutions that simply invest money for future dividends and for the potential increased value of their shares, whereas in small companies they may be the people who established the business or who have a more personal stake in it. When investors buy shares of companies, they receive certificates that say how many shares they own. Owning shares of a company often entitles an investor to a part of the company's profits, which is issued as a dividend. In addition, shareholders are typically offered a fixed payout per share if the company is bought out. Because they are partial owners of a company, shareholders areallowed to vote at shareholder meetings for certain company actions (such as approving or rejecting a merger proposal), review company accounts, and receive periodic reports on company performance. If shareholders cannot attend annual meetings, they are permitted to vote by proxy by mailing in their vote. Furthermore, if a company decides to issue more shares, current shareholders have the option to buy shares before they are offered to the public.
Shareholders are entitled to vote on a variety of issues, although the specific areas where shareholders have a say are determined by state laws and corporate bylaws.
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