Shareholders are individuals who own shares in a company. Shares represent shares in a company and give the right to receive income from activities. In addition, shareholders have certain rights that protect their interests and ensure participation in management. In this article, we would like to describe the duties and rights of shareholders.
One of the fundamental rights of shareholders is the right to vote at meetings of a joint-stock company. Shareholders’ meetings are held to make crucial decisions, including selecting the company’s governing body, approving financial statements or dividends, and amending the charter.
Each shareholder has the right to one vote at the shareholders’ meeting, so it allows him to express his opinion and influence the solutions that the company accepts. Another vital right of shareholders is the right to receive dividends. Dividends are part of the company’s profit, which is distributed among the shareholders according to their share in the company.
A shareholder may pay dividends quarterly or annually, and each company sets these terms individually. The right to receive dividends is an important motivating factor for all investors who invest their money in a particular company. The third important right of shareholders is information about company activities.
Companies should provide shareholders regular information about their activities, including financial statements, sales reports, and other vital data. This factor helps shareholders to assess the company’s financial position and make informed investment decisions.
One of the primary responsibilities of shareholders is compliance with corporate governance rules. This means that they must participate in the selection of the management of the company and control its acts. In addition, they should monitor the financial condition of the company and its activities in general.
Another critical responsibility of shareholders is to participate in important decision-making. These decisions include, for example, changing a company’s charter, increasing or reducing capital, or mergers or acquisitions of other companies. Shareholders must vote and express their opinions and positions on these issues.
In addition, such business members as shareholders are obliged to protect the company’s and its shareholders’ interests. They should ensure that the company’s board does not violate the laws and make decisions that may harm the company or its shareholders. They could apply to the courts or other bodies to protect their rights.
In summary, shareholder rights and obligations are critical components of corporate culture that govern the relationship between shareholders and the company. Shareholders have the right to participate in the management, receive dividends and information about the activities of the company, as well as protect their rights in court.
At the same time, shareholders have obligations such as paying the share fee, observing voting rules and participating in meeting decision-making. Awareness of their rights and responsibilities helps shareholders participate effectively in the company’s management and protect their interests.