Shareholders are people who own shares in a company, and receive benefits from the company’s performance. One can invest in various ways as a shareholder whether it is a private or public business.

A shareholder can sell their shares to an investor to earn a profit. If a business’s profits grow and the value of shares will rise as well which is referred to as capital gain. Shareholders are legal entities, individuals or members of a corporation.

There are different types of shareholders, and their rights and priviliges depend on the type. Some shares have voting rights however, others don’t. Certain shares are also able to receive dividends in a different manner as compared to other shares. These rights are outlined in the company’s charter or bylaws as well as in state laws.

The three main categories of shareholders are common, preferred and institutional. Common shareholders are people who hold the common stock of a corporation. They have the right to vote and can influence corporate decisions and decisions. Dividends are paid out based on the company’s earnings. Preferred shareholders, on other on the other hand, are more favored over common shareholders with respect to dividend distribution, and have a higher claim on assets in the event of liquidation. Institutional shareholders are companies like hedge funds, pension funds, and mutual funds that hold large shares in a business.

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