The term shareholder refers to a person or other entity which owns a share of a business, corporation, investment fund, association or any other enterprise the ownership of which is divided into ownership shares.
This term is most widely used to denote the individuals (and other entities) who own shares in a corporation’s stock. When an investor purchases shares in a public company on a stock exchange or through a stock broker or transfer agent, they become a shareholder – and therefore a part-owner – in that company.
Shareholders in a public company may be registered shareholders listed in a the company’s share register, or they may be unregistered shareholders, meaning they are not listed as owners of the company in its share register.
In most jurisdictions, an entity’s shareholders normally have the right to vote on important decisions and to elect the entity’s directors. In the case of commercial enterprises, shareholders normally have the right to receive dividends based on their share of ownership in the company.
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