Business, Legal & Accounting Glossary

Definition: Shareholders

Quick Summary of Shareholders

An owner of a corporation whose ownership interest is represented by shares of stock in the corporation. A shareholder — also called a stockholder — has rights conferred by state law, by the bylaws of the corporation and, if one has been adopted, by a shareholder’ s agreement (often called a buy-sell agreement). These include the right to be notified of annual shareholders’ meetings, to elect directors and to receive an appropriate share of any dividends. In large corporations, shareholders are usually investors whose shares are held in the name of their broker. On the other hand, in incorporated small businesses, owners often wear many hats — shareholder, director, officer and employee — with the result that distinctions between these legal categories become fuzzy.

What is the dictionary definition of Shareholders?

Dictionary Definition

A shareholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders may be referred to as members of a corporation.

One who owns shares of stock in a corporation.
Shareholders are the real owners of a publicly-traded business, but management runs it.
A shareholder is an individual or organization owning stock in a company. Pension funds and mutual funds are examples of shareholders that are also organizations. Shareholders have a legal claim on a percentage of the company’s earnings and assets, and share the same level of limited liability as the company itself. In cases of bankruptcy, shareholders generally lose the entire value of their holdings.

Typical shareholders have limited influence over publicly traded companies beyond voting for the Board of Directors. Shareholders who hold large percentages of a company must meet additional regulatory requirements, such as publicly reporting the extent of their holdings. Shareholders who are also company insiders are required to file public disclosures whenever they wish to increase or decrease their holdings.


Full Definition of Shareholders

A shareholder or stockholder is an individual or company (including a corporation), that legally owns one or more shares of stock in a joint-stock company. Companies listed in the stock market strive to enhance shareholder value. Stockholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned) on matters such as elections to the board of directors, the right to share in distributions of the company’s income, the right to purchase new shares issued by the company, and the right to a company’s assets during a liquidation of the company. However, stockholder’s rights to a company’s assets are subordinate to the rights of the company’s creditors. This means that stockholders typically receive nothing if a company is liquidated after bankruptcy, although a stock may have value after bankruptcy if there is the possibility that the debts of the company will be restructured.

Stockholders or shareholders are considered by some to be a partial subset of stakeholders, which may include anyone who has a direct or indirect equity interest in the business entity or someone with even a non-pecuniary interest in a non-profit organization. Thus it might be common to call volunteer contributors to an association, such as a hypothetical online open-content encyclopedia, stakeholders, even though they are not shareholders.

Examples of Shareholders in a sentence

The government still acts as a majority shareholder within the industry.
He’s the Managing Director as well as a major shareholder in Payroll Heaven.
Employee loyalty makes for customer loyalty and shareholder loyalty.
It’s often agreed that salaries should be performance-related and subject to shareholder control.
It also served to widen our shareholder base significantly.
The Bank will report stock losses and dividends next month at the annual shareholder meeting.
In this instance no shareholder is permitted to own more than a tenth of the company.
Such a drastic measure would normally require independent shareholder approval but in this case that necessity has been waived.

Synonyms For Shareholders

shareholder, stockholders, stockholder, stakeholders, owners

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Shareholders. Payroll & Accounting Heaven Ltd. August 05, 2021
Chicago Manual of Style (CMS):
Shareholders. Payroll & Accounting Heaven Ltd. (accessed: August 05, 2021).
American Psychological Association (APA):
Shareholders. Retrieved August 05, 2021, from website:

Definition Sources

Definitions for Shareholders are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd April, 2020 | 5 Views.