Saturday, January 12, 2013

Your Rights as a Stockholder

Corporations issue two fundamental kinds of stock, common and preferred. Ownership is shown by a stock certificate, usually bearing your name and the signatures of atleast two officers of the corporation.  Your name is also entered in the books od the corporation.

Common stockholders have the ordinary capital stock of the company. If you own common stock you are entitled to vote at the annual and special meetings of the corporation of the corporation where directors are elected or re-elected. If you do not attend these meetings you can appoint someone else to act as your proxy or representative and cast your vote.

Preferred stock ussually entitles you to the same voting rights as common stock. The difference between the two is that preferred stock entitles you to a fixed dividend every year regardless of the company's profit or loss.

If the corporation issues new stock, the shareholder has a right to buy proportionate number of the new shares to preserve shareholding pattern.

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