The owners of a corporation are its shareholders. They invest capital, receive voting rights over certain matters, and receive dividends and residual claim on the company’s assets.
The shareholders of any company have a responsibility to ensure that the company is well run and well managed. They do this by monitoring the performance of the company and raising their objections or giving their approval to the actions of the management of the company.
Shareholders’ Roles and Rights:
- Appointment of directors. …
- Legal action against directors. …
- Right to appoint the company auditors. …
- Voting rights. …
- Right to call for general meetings. …
- Right to inspect registers and books. …
- Right to get copies of financial statements. …
- Winding up of the company.
Levels of Ownership Rights
Every company has a hierarchical structure of rights for the three main classes of securities that companies issue: bonds, preferred stock, and common stock. In other words, there’s a pecking order of rights.
Your liability as a shareholder is generally limited to the unpaid amount on your shares.
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This means that separate from the liabilities of the individual members of the company, a company can:
- enter into agreements;
- assume obligations;
- pay taxes or debts; and.
- sue or be sued in its own right.
A corporation is an incorporated entity designed to limit the liability of its owners (called shareholders). Generally, shareholders are not personally liable for the debts of the corporation. Creditors can only collect on their debts by going after the assets of the corporation.
All shareholders have the right to receive notice of general meetings and attend them. This includes both Annual General Meetings and Extraordinary General Meetings, but does not extend to meetings of the company directors. Shareholders will usually have the right to vote at the General Meeting.
Conclusively, the shareholders are owners of stock in the corporation. They are not the owners of a corporation’s assets.
Companies are required to send a copy of its annual accounts and reports for each financial year to every shareholder of the company. … Shareholders are not however entitled to receive or inspect copies of general a company’s financial records.
Question: Can shareholders insist on seeing management accounts, bank statements or other detailed financial information? Answer: No. Their rights to see financial information are limited to the company’s annual filed accounts.
Limited liability is a legal status that limits a person’s financial liability to a fixed sum. In the case of company debts, the shareholders are only personally liable for the debt to the value of the money they have invested in the company. … Therefore, the shareholders are legally liable for the debts of the business.
Shareholders are generally not liable (or legally responsible) for company debts. As a shareholder, you are only legally responsible for any amount unpaid on your shares.