Who is a shareholder in a company
Shareholders: definition - major shareholder, major shareholder, small shareholder
If you buy shares, you become a shareholder and co-owner of this company. The more shares you hold, the greater your voting rights and influence over the company. In this tip we explain what distinguishes the main shareholder from the major shareholder and what rights and obligations all shareholders have.
What is a shareholder? Definition of the term
The shareholder has bought shares, i.e. securities of a stock corporation (AG). He is a co-owner of a company because he owns shares in the stock corporation. The stock corporation has the money paid for the share available as capital if the share is issued as an initial or new issue.
- He can only end his participation in the AG by selling the shares on the stock exchange. As a shareholder or partner, the shareholder has both rights and obligations towards the company.
With your Right to vote the shareholders also have an influence on the company's course and whether they still trust the management board and the supervisory board (grant discharge).
- With your Right to vote the shareholders can also influence the course of the company and whether they still trust the management board and the supervisory board (grant discharge).
- The right to pay a dividend is called Property law. With the payment of the dividend per share, the shareholder participates in the profits. If the AG has made high profits, a high dividend is usually paid out (dividend yield). This increases the overall attractiveness of buying the company's shares.
- The Subscription right of the shareholder occurs when a stock corporation wants to increase its share capital. To do this, it places newly issued shares, so-called young shares, on the stock exchange. They offer this to the shareholders. The higher the shareholder's share of voting rights, the more new shares are available to the shareholder through subscription rights.
- If the AG is about to be sold and the company is dissolved, the shareholder has the right to participate in the sales proceeds from the liquidation. This is based on the shares in the company and the ratio of its shares to the total capital.
- The right of providing information ensures the shareholders at the general meeting to be informed about all important matters of the AG. This includes the results of the last financial year and forecasts for the coming months as well as other plans of the AG. All questions from shareholders must be answered truthfully.
Obligations of the shareholders
A shareholder's primary duty is to pay their contribution, i.e. they pay for the shares they hold. To do this, he subscribes the share at the current purchase price. The contribution is limited to the share price.
- If he does not pay, there is a risk of penalty interest, damages or a contractual penalty. However, the shareholder is not obliged to add further capital if the company gets into economic difficulties and the share price changes at a later point in time.
- The Loyalty Duty of a shareholder consists in not acting against the interests of the AG or the other shareholders. For example, he must not enrich himself at the expense of this.
What is a major shareholder?
The shareholder who holds most of the shares in a company is called the main shareholder. This means that he has the greatest influence on what happens in the company, because the main shareholder invests most of the money in the company. If he holds more than half of the common shares, he has the right to control the company. The main shareholder holds most of the voting rights.
The major shareholder
The major shareholder also has a considerable stake in shares. As a result, he has great influence on the business of the stock corporation at the general meeting by exercising voting rights. Although the major shareholder holds a slightly smaller proportion of shares than the major shareholder, his share of the share capital is not insignificant.
- The major shareholder is usually represented on the supervisory board of a group. Often, joint-stock companies are in turn the major shareholders of other joint-stock companies. New major shareholders or a change in these companies attracts a lot of attention on the stock exchange.
The small shareholder
Small shareholders only own a small fraction of a company's stock. As a result, they can have little influence on the management and processes. Small shareholders are also called minority shareholders.
- Many private investors hold individual shares in various companies in their portfolios as small shareholders. You want to make a profit with the securities and use it as an investment. The influence on the management is not in the foreground.
In the next tip you will learn more about the stock index
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