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A shareholder is an individual or organization owning stock in a company. Pension funds and mutual funds are examples of shareholders that are also organizations. Shareholders have a legal claim on a percentage of the company's earnings and assets, and share the same level of limited liability as the company itself. In cases of bankruptcy, shareholders generally lose the entire value of their holdings.
Typical shareholders have limited influence over publicly traded companies beyond voting for the Board of Directors. Shareholders who hold large percentages of a company must meet additional regulatory requirements, such as publicly reporting the extent of their holdings. Shareholders who are also company insiders are required to file public disclosures whenever they wish to increase or decrease their holdings. |
