Whether a person owns one share of a company or whether he owns thousands of shares he is referred to as a shareholder. Every shareholder is a part owner of the company in which he owns shares. A person may purchase shares in many companies and thus be a part owner in each of these companies
Essential features
- Beyond the face value of the shares of which he is the owner, he is not personally liable for the debts of the company;
- When the company performs well, he may profit from dividend or capital appreciation. The opposite is true if the company incurs losses;
- Though he is a part owner of the company, he plays a limited role in the management of the company. That is taken care by the Board of Directors and the management team. But the directors are elected by the shareholders;
- A shareholder has the right to transfer and transmission of his shares;
- He has the right to inspect the books of the company;
- He has the right to attend or appoint a proxy to represent him at general body meetings of the company and either he or his proxy can vote on the resolutions;
- He is entitled to be allotted bonus shares and be offered rights shares.
