Shareholders own shares in a company and benefit from its success. One can be a shareholder in a public or private business, and can invest in a number of different ways.

A shareholder may also sell their shares to investors, and this allows them to get a return on their investment. If the company’s profits rise in value, the value of shares will also increase as this is referred to as capital gains. Shareholders are legal entities, individuals or members of a corporation.

There are many types of shareholders in a company and the type of shares they are based on determines their rights and privileges. For instance, certain shares have voting rights while others don’t. Certain shares are also able to receive dividends in a different way than others. These rights choosing a name for your llc are specified in the charter or bylaws of the company, as well as state laws.

The most popular categories of shareholders are preferred, common and institutional. Common shareholders are people who own the common stock of a company. They are entitled to vote and influence corporate decisions and decisions. They also get dividend payments based on the profit of the company. Preferred shareholders have priority over ordinary shareholders in dividend distribution. They also have a higher claim on assets if the company is liquidated. Institutional shareholders are big organizations such as pension funds, mutual funds and hedge funds which own substantial shares in the company.