Your Rights As A Shareholder

If you own any shares in a corporation (and if you're a stockholder, you do), you should know that ownership isn't just about (hopefully) collecting a profit over time. Rather, all shareholders enjoy partial ownership of the company in question – a responsibility that comes with a number of additional rights and benefits. And although the specifics will vary depending on the organization, there are a number of rights that can generally be considered standard:

Attendance and participation in annual shareholders meetings

As a partial owner, you have the right to voice your ideas and concerns regarding the future of the company, and to exercise influence. This is done via annual meetings, in which numerous issues are voted upon (including mergers, dissolution, and the election of directors), although voting by proxy is possible in the event that travel to the physical location is not possible. In most cases, the strength of your vote correlates to the size of your stake in the corporation.

Transparency and accountability from directors

In addition to receiving news and observing elections at the annual meeting, all shareholders are entitled to view corporate records and financial books – an opportunity provided by the annual report and any other public filings. Should any officials in the company ever commit wrongful acts – including the falsifying of financial information, and misleading shareholders with regards to the company's health and outlook – you have the right as a shareholder to file and/or participate in a class-action lawsuit against the offending parties.

Transfer of share ownership

It's your right as a partial owner to trade your shares on a public exchange. This is important because it ensures that you are able to reduce your investment in the company, or even drop it altogether, without coercion or interference from other interested parties – and receive a fair price in the process.

A share of the profits

Owning a stake in the company means you're entitled to a portion of the company's assets. This is immediately reflected in the value of your shares, but it also means that these assets generate profit for the company, you will receive a portion of these profits. Often, corporations will reinvest this profit internally, fueling growth and providing your returns in the form of higher share values. A company may also elect to redistribute any non-invested profits directly to its shareholders, in the form of additional shares, property, or cash. These are referred to as "dividends."

For more information, contact James Gioia & Company PC or a similar firm.