Shareholding

A shareholder or stockholder is an individual or institution (including a corporation) that legally owns one or more shares of in a public or private corporation. Shareholders may be referred to as members of a corporation. Legally, a person is not a shareholder in a corporation until his or her name and other details are entered in the register of shareholders.

Shareholders of a corporation are legally separate from the corporation itself. They are generally not liable for the debts of the corporation; and the shareholders' liability for company debts are said to be limited to the unpaid share price, unless if a shareholder has offered guarantees.

Shareholders are granted special privileges depending on the class of stock. The board of directors of a corporation generally governs a corporation for the benefit of shareholders.

Subject to the applicable laws and rules of the corporation, other rights of shareholders may include:

Shareholders are considered by some to be a subset of stakeholders, which may include anyone who has a direct or indirect interest in the business entity. For example, employees, suppliers, customers, the community, etc., are typically considered stakeholders because they contribute value and/or are impacted by the corporation.

Shareholders may have acquired their shares in the primary market by subscribing to the IPOs and thus provided capital to corporations. However, the vast majority of shareholders acquired their shares in the secondary market and provided no capital directly to the corporation.

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