What is a shareholder and what is their role in a company?
Find out what a shareholder is and why you should be a partner in a listed company
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Do you know what a shareholder is? Basically, a shareholder is a natural or legal person who owns shares in a corporation.
When you buy shares on the stock exchange, you become a shareholder and have a stake in that company.
But what is the role of such an investor? That's what you'll find out now!
Read on for more information.
What is a shareholder?
When a person owns shares in a public limited company, they become the "owner" of part of that company, according to the number of shares they have acquired.
This investor is called a shareholder.
In addition, there is the possibility of other companies being shareholders in a company.
There are three types of shareholders:
- Controlling shareholder: this shareholder has greater influence over the decision-making of the company in which he has become an investor. In other words, they have control over the shares of the company listed on the stock exchange.
- Majority shareholder: is an investor, whether an individual or a company, who holds more than 50% of voting shares in an organization. In this way, they have voting rights and shareholder control.
- Minority shareholder: although they don't own the majority of the company's shares, minority shareholders have information about the company and must vote on important decisions.
What are the rights of a shareholder?
Many investors don't know this, but when you become a shareholder, you have a number of rights and duties.
Rights are divided into two categories:
- Essential rights: are the rights relating to profit-sharing, supervision of the company and voting.
- Changeable rights: arising from the law or the company statutes. They can be altered or deleted, with the exception of those that are essential.
How does a shareholder make money?
After all, how does a shareholder make money?
Remuneration can take the following forms:
Price appreciation
When you buy shares in a company, the most common way to make a profit is through share price appreciation, especially in the long term if the company performs well.
Dividends
Dividends are a portion of a company's profits distributed to shareholders.
However, it is important to know that dividends are distributed according to each shareholder's percentage stake in the company.
Share buybacks
A share buyback is a procedure whereby the company acquires shares on the market in order to hold them in its treasury or cancel them.
In order to add more value to the members, the company can carry out share programs.
In these situations, the company uses cash and repurchases shares that are circulating on the market.
What are the main types of shares?
Anyone who wants to become a shareholder also needs to know what the main types of shares are.
Basically, the most important types of shares for listed companies are:
Ordinary shares
Ordinary shares (ON) give you the right to vote at company meetings.
Voting takes place in proportion to the number of shares held by each investor.
In other words, in practice, anyone who owns 1 paper is entitled to 1 vote. On the other hand, those who own 500 papers are entitled to 500 votes.
This means that the greater the number of shares, the more relevance the shareholder will have in the company's main decisions.
Preference shares
Preferred shares (PN) do not grant shareholders the right to vote at meetings.
However, those who own these shares have preference when it comes to receiving the company's profits in the dividend distribution process.
Units
Unit shares are a combination of ordinary and preference shares.
This means that anyone who buys a unit acquires a number of shares in the same company, but of different types.
The advantage in this case is that you only pay for the package once.
How to start investing and become a shareholder?
To become a shareholder in a publicly traded company, i.e. those traded on the Stock Exchange, you need to acquire at least one share in the company in question.
Here's how to start investing in shares:
Know your investor profile
The investor profile is an analysis that identifies your preferences and expectations in relation to investments.
Some brokers offer a questionnaire free of charge to help you identify your profile.
That way, they can identify which financial products are right for you.
It's important to remember that shares are variable income investments and therefore there are more risks involved.
For this reason, they are recommended for bolder profiles, who have a higher tolerance for risk, and moderate profiles, who are investors who prioritize security but are willing to give up part of it in order to obtain good returns.
Open an account with a stock broker
To invest in the stock market, you need to have an account with a stock broker, which is a financial institution authorized to operate on the trading floor.
But before you choose a particular broker, you need to analyze a few factors, such as brokerage fees, the availability of investment reports, the company's reputation in the market, among others.
Normally, to open an account with a broker, you need to send photos of some personal documents, such as your ID card, and fill out a registration form.
Choose stocks and build your portfolio
To be successful on the stock market, you need to develop an investment strategy.
This way, you can increase profits and dilute risks.
If you've put together an investment strategy, then it's time to choose the assets you want to invest in and make the purchase!
Conclusion
Now you know what a shareholder is, what their rights are and how they can make a profit on the financial market.
If you want to start investing in the stock market in 2022, start studying the market and make sure you know your investor profile!
This will make it easier for you to find assets aligned with your profile and financial objectives.
