Institutions or individuals that own shares in a company are the various types of shareholders. Shareholders have different legal rights that allow them to vote on specific corporate issues, receive dividends and have rights to the company’s assets when liquidating. The various kinds of businesses around the world provide a wide range of products and services, which vary in size and industry. Amazon, for example, sells everything from books to kitchen gadgets. Apple is known as a maker of cutting-edge electronic devices like smartphones, watches, earphones, and personal computers.
Generally, there are two kinds of shareholders: common and preferred. Common stock holders enjoy a partial ownership of the company and have the right to vote and a share of profits (if any). This kind of share typically has higher returns over the long run, however it does not guarantee an annual dividend. Common stockholders have the right to look over company records, including shareholder lists and minutes of meetings.
Preferred shareholders receive an annual guaranteed dividend and have preference over other stockholders in the case of liquidating assets. They are not able to vote on the board members or any other policies of the company. The term “shareholder” is often used interchangeably with “stakeholder,” but stakeholder has a wider definition that includes employees, customers as well as local communities, suppliers and customers and shareholders directly contribute to the company’s financial success.