Institutions or individuals that own shares in a business are the different kinds of shareholders. Shareholders are entitled to different rights under the law, including the right to vote in corporate matters, receive dividends, and take advantage of assets in a liquidation. Companies of all sizes and sectors offer a range of products and services. For instance, Amazon sells a variety of items from books to kitchen appliances, and Apple is renowned for its innovative electronic devices like personal computers, smartphones or earphones.
Generally, there are two kinds of shareholders: preferred and common. Anyone who owns common stock has some ownership of the company and is entitled to vote rights and a portion of the company’s earnings (if there is profit). In general, this type of share has higher rates of return over the longer term but it’s not guaranteed to pay an annual dividend. Common stockholders have the right to look over the company’s records, including the minutes of meetings and shareholder lists.
Preferred shareholders receive a yearly dividend in addition to having priority over common stockholders in the event of liquidating the company’s assets. They cannot vote for the board members or any other policies of the company. The term “shareholder” could be used interchangeably with the phrase “stakeholder,” but stakeholder is a broad term that includes customers, employees, suppliers and local communities, while shareholders directly invest in the profitability of a company.