A shareholder is a person or a company that holds shares in a company and thus has the right to vote on major company decisions. They also make money through the growth of their share portfolio or by receiving dividends from businesses. Shareholders’ rights and duties are determined by the number of shares they hold. They can be divided into categories like majorities and minorities.

Someone who holds more than 50% of a business’s shares is a majority shareholder. It is usually the founders, but can also be an organisation which purchases more than 50 percent of the shares in the business. A majority shareholder has the power to vote on key decisions, and may choose who is on the company’s board. They also have the right to bring suit against a company for any wrongdoings committed by it.

You are considered a minority shareholder when you have more than 25 percent of the shares of a company. You have the right to vote on major decisions, but you don’t have much control over the company. Minority shareholders still have the right to sue the company if they commit any wrongdoing but they don’t have as much power as the majority shareholders.

There are two kinds of shareholders: common shareholders and preferential shareholders. Both types of shareholders are entitled to vote on important decisions and decide who is on the board of directors, however the type of shares you own determines your voting rights. Common shareholders hold the largest amount of votes. They also are entitled to receive dividends if the company makes a profit in the fiscal year, however they do not receive a guaranteed rate of dividend payment as preferred shareholders do.

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