The different kinds of shareholders in a firm are individuals or institutions that have shares of the company’s stock. Shareholders have many legal rights that include the right vote in corporate matters, receive dividends, and be able to claim assets in liquidation. Companies of all sizes and industries provide a wide range of products and services. For example, Amazon sells a variety of items ranging from books to kitchen appliances, while Apple is known for its innovative electronic gadgets such as personal computers, smartphones as well as earphones, watches and other gadgets.
There are two kinds of shareholders in general: common and preferred. Anyone who owns common stock is partial ownership of the company that is, they are entitled to vote rights as well as a portion of the company’s earnings (if there is profit). This kind of share typically offers higher returns over the long run, but it may not guarantee an annual dividend. Common stockholders have the right to access company records, including shareholder lists and meeting minutes.
Preferred shareholders receive an annual guaranteed dividend and have priority over other stockholders in the event of liquidating assets. They are not able vote on board members or other policies of the company. The term “shareholder” could be used interchangeably with “stakeholder,” but stakeholder is a more broad term that includes employees, customers as well as local communities and suppliers and shareholders are directly invested in the profitability of a company.