Rights and Privileges of Common Stockholders

Rights and Privileges of Common Shareholders

Rights and privilege of equity shareholders vary from state to state, and country to country but some common rights are given below:

Right on income and assets

Common stockholders (equity shareholders) have the right on profit of the organization.

Similarly, they have right on remaining fund after paying all liabilities.

Thus equity shareholders have right on income and assets.     

Voting right

Every equity shareholder has voting right to elect managing directors.

Each shareholder has one voting right. In the absent of shareholder, proxy vote can be done.

After electing managing director, he does work in favour of shareholders.

Dividend

Equity shareholder receives dividend on his shares.

Dividend is paid from profit.

If there is loss in any accounting year, shareholders cannot receive dividend.

There is not dividend guarantee.

Transfer of ownership

Shareholders can transfer their right of shares to other person.

The right to transfer of ownership is ordinary.

It can be done with the help of share broker. 

Share broker charges his fees for this work.

Authority to inspect books and records

Shareholders have authority to inspect books of accounting.

Although all the limited companies publish their financial statement at the end of accounting period yet shareholders can inspect any working time of the company.

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