1.13What is a shareholder?
1What is it?
A shareholder is anyone who owns at least one share of a company.
2Why does it exist?
Shareholders are the owners. The company’s management works for them, and the law gives them rights.
3Stock market example
Shareholder rights in India include:
- Receiving dividends when declared.
- Voting at the AGM (Annual General Meeting), e.g. on appointing directors.
- Getting the annual report and results.
- Receiving bonus shares, rights issues and buyback offers.
Companies also show a shareholding pattern: how much the promoters (founders or controlling owners), institutions and the public own.
4Diagram
- Promoters50%
- Foreign institutions (FII)20%
- Domestic institutions (DII)18%
- Public (retail)12%
5Quick revision
- A shareholder owns one or more shares.
- Shareholders get dividends and voting rights.
- The shareholding pattern shows who owns the company.
6Knowledge check
Q1. Do you need 100 shares to be a shareholder?Show answer
No. Even 1 share makes you a shareholder.
Q2. What is the AGM?Show answer
The Annual General Meeting, where shareholders vote on important matters.
Q3. Who are promoters?Show answer
The founders or controlling owners of a company.