What do the Stockholders Really Own?

What do the Stockholders Really Own?

Shareholders are the ultimate owners as well as the significant members of the Company. People bearing one or more share of the company are being called to the shareholders or the stockholders. It is commonly accepted that stockholders own the company in which they hold stock. But stockholders do not own property in the sense in which we usually think of property ownership. He must own shares of stock to qualify, but it doesn’t matter if they’ve purchased the stock or been given it as an incentive or part of their pay.

(a) Company property: Stockholders do not have title to company property nor they can control its use in the same way that a single proprietor controls his property.

(b) Corporate management: Property is owned by the corporation not by the stockholder and corporate management determines how corporate property will be used.

(c) Corporate policy and management decisions: Since stockholders do not own company property, they can control its use only to the extent that they can influence corporate policy and management decisions

Therefore, small stockholders who own only a few shares have little influence on the company.

Specific rights of stockholders are established by law.

(a) Influence corporate policy: Legally, stockholders can influence corporate policy through the voting mechanism or, if necessary, by challenging actions of corporate officers in the courts.

(b) Right to share profits: Stockholders have the right to share in the profits of the enterprise if dividends are declared by directors.

(c) Right to receive annual reports: They have the rights to receive annual reports of company earnings and companies activities.

(d) Right to inspect the corporate books: Stockholder has the rights to inspect the corporate books.

(e) Right to elect directors: The have the rights to elect directors and to hold those directors and the officers of the corporation responsible for their acts.

(f) Right to vote: Stockholders have the right to vote on mergers, consolidations, changes in the charter.

(g) Right to bring other proposals: They have the right to betas other proposals before the stockholders.

(h) Right to dispose of ownership certificates: Stockholders have the right to dispose of ownership certificate.