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Key Takeaways. Buying a share of a company makes you a shareholder, but it does not give you a say in the day-to-day operations of a company. Shareholders own either voting or non-voting stock, and that determines whether they can weight in on big picture issues the company is considering.
Common stock is a class of stock that represents equity ownership in a corporation. Owners of common stock, called shareholders, are entitled to the following rights: Voting rights to elect the members of the board of directors. Typically, shareholders may cast one vote per share.
Shareholders also have the right to vote on matters that directly affect their stock ownership, such as the company doing a stock split or a proposed merger or acquisition. They may also have the right to vote on executive compensation packages and other administrative issues.
Most publicly traded companies issue two types of stock: common stock and preferred stock. Common stock typically comes with voting rights, while preferred stock does not.
The corporation specifies shareholders' rights in the shareholder's agreement. Shareholders have the privilege to vote on corporate guidelines, decisions, the composition of the board of directors, and other matters. Generally, these votes are conducted during the company's annual shareholder meeting.
Shareholders typically vote for the board of directors at the annual meeting of shareholders. In most cases, shareholders can vote in person at the meeting or by proxy, which allows them to appoint someone else to vote on their behalf. Some companies may also allow shareholders to vote by mail or online.
The canvass is the official tally of votes for any given election. The purpose of the canvass is to account for every ballot cast and ensure that every valid vote cast is included in the election totals.
Common shareholders are granted six rights: voting power, ownership, the right to transfer ownership, a claim to dividends, the right to inspect corporate documents, and the right to sue for wrongful acts.