Accounting

Who Is a Shareholder In a Company

Who is a shareholder?

Shareholder – Who is a shareholder?

Shareholders are natural or legal persons holding shares (shares) of a company. A shareholder is a natural or legal person who, by investing capital in an undertaking, holds a share, acquires a right of scrutiny and sometimes in decision making and is entitled to receive dividends.

This term refers to any natural or legal person holding shares in a company. In return for holding the shares, the shareholder may receive dividends, attend and vote at general meetings (unless his shares are “non-voting”) and are entitled to a liquidation bonus in the event of the dissolution of the shares ‘business.

6 Categories of Shareholders

Shareholding, which is considered internal when the shareholders have a direct personal and professional relationship with the company (family, employee) or external in all other cases (individual, institutional, industrial and public), is generally defined in 6 distinct categories :

  1. Familial: the majority of the shares are held by members of the same family, and passed on from one generation to the next,

2. Employee: these are shares that are purchased by the employee or offered by the company in addition to salary,

3. Individual: this type represents shareholders called “small porters” investing individually in companies,

4. Institutional: this corresponds to the investments made by pension funds (private pension funds) which give priority above all to a strong and rapid profitability,

5. Industrial or enterprise: this is the entry into the capital of a company by another company which generally shares the same sector of activity,

6. Public: where the State or territorial people own shares in undertakings which are generally related to the public service.

Shareholders’ meetings

Unit-holders (shares) in a company meet on a regular basis in order to decide on the company’s objectives, the strategy to be adopted to ensure its best return and ultimately to realize greater profits.

Annual General Meeting (AGM): it deals with classic and recurring themes, the annual accounts, the signing of new conventions, etc. The AGM generally meets once a year.

Extraordinary General Meeting (EGM) or Special Meeting : this meeting is convened in a more exceptional way, when important decisions must be taken without delay. This may include a capital increase or reduction strategy in response to market fluctuations, a crisis, and so on. The EGM also meets when the decision to liquidate a company must be made.

Whether it is called ordinary or extraordinary, the AGM is always for the shareholders a key moment that influences the choice to retain or separate from its actions.

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