Shareholders are those who own shares of an organization, and profit from the company’s performance. A person can be a shareholder in a private or public business, and they can invest in a variety of different ways.

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

There are a variety of shareholders in a company, and the type they own determines their rights and privileges. Certain shares are eligible for voting rights however, others don’t. Certain shares are also paid dividends in a different way than others. These rights are stipulated in the charter or bylaws of the company as well as the laws of the state.

Common preferred, institutional, and other categories are the main kinds of shareholders. Common shareholders are the individuals who have ownership of a company’s common stock, and they enjoy the right to vote on corporate issues and business decisions. They also get dividend payments according to the profits of the company. Preferred shareholders are more favored than ordinary shareholders when it comes to dividend distribution. They also have a higher claim on the assets of the company if it is liquidated. Institutional shareholders are large companies like pension funds, mutual funds and hedge funds that own substantial shares in the company.