Shareholder Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Shareholder, written in plain English, along with examples of how it is used.

What is Shareholder?

(n) Share holder is the person holding an equitable portion of the share capital of a body corporate or association of peoples formed with a share capital.

History and Meaning of Shareholder

Shareholders are individuals or entities that hold ownership in a company. They are the owners of the company, as they have invested their money into it by purchasing shares of stock. Shareholders have certain rights, such as voting on important company decisions and receiving a portion of the company's profits in the form of dividends.

The concept of shareholder ownership dates back to the 1600s when the Dutch East India Company issued the first-ever shares of stock to investors. This allowed investors to buy and sell ownership in the company, providing them with a way to invest in a company without having to be involved in its day-to-day operations.

Today, shareholders are a crucial part of the corporate world, providing the capital needed for companies to grow and expand.

Examples of Shareholder

  1. John is a shareholder in XYZ Corporation. He owns 500 shares of stock in the company and has the right to vote on important matters affecting the company's direction.

  2. ABC Company is offering its shares of stock to the public for the first time. As a shareholder in the company, you will have the opportunity to participate in the company's growth and profitability.

  3. Mary inherited shares of stock in her grandfather's business. As a shareholder, she will receive a portion of the company's profits.

Legal Terms Similar to Shareholder

  1. Stockholder - Similar to a shareholder, a stockholder is an individual or entity that holds ownership in a company.

  2. Equity Holder - An equity holder is an individual or entity that holds an ownership interest in a company, typically in the form of shares of stock.

  3. Investor - An investor is an individual or entity that provides capital to a company in exchange for ownership or the possibility of a return on investment.