What does it mean to be a shareholder in a company?

When you invest in public companies, you purchase shares of the company's stock. Each share of stock you own reflects a small portion of ownership of the company, making you a shareholder. What is a shareholder? A shareholder can be an individual or entity — such as a company or organization — that owns stocks in a particular company.

What are the rights and responsibilities of a shareholder?

Being a shareholder (or a stockholder, as they’re also often called) comes with certain rights and responsibilities. Along with sharing in the overall financial success, a shareholder is also allowed to vote on certain issues that affect the company or fund in which they hold shares.

Who is a majority shareholder in a company?

A single shareholder who owns and controls more than 50% of a company’s outstanding shares is called a majority shareholder. In comparison, those who hold less than 50% of a company’s stock are classified as minority shareholders. Most majority shareholders are company founders.

What is a shareholders' agreement?

A shareholders' agreement, also called a stockholders' agreement, is an arrangement among shareholders that describes how a company should be operated and outlines shareholders' rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders .