»Shareholders

Shareholders are literally the persons who physically hold shares of a stock in a corporation.  That is, they are the de facto owners of the company. Generally, there is a direct correlation between the number of shares a shareholder owns and the size of the investment he/she has in the company. The number shares owned in proportion to the number issued determines the proportion of ownership of each shareholder.

While stock ownership has its rewards and privileges, corporate management is not one of those benefits. In the capacity of “shareholder”, a person does not run the corporation. The shareholders use their power of ownership, the stock, to elect others who run the company to the shareholders advantage (profit) or find themselves promptly replaced.

Any person, real or legally defined/created, can own shares of stock. That stands to reason. Any legal entity that can exercise ownership rights can buy, hold and own stock. The one exception to this stock holding rule is a restriction on the ownership of S-corporation stock– alien nations may not be owners of S-corporations.  For C-corporations and other business organizations nationality status generally is not relevant to ownership.

Any person can wear more than one hat. That is to say, a shareholder can also be an officer of the corporation, a director, or all three. One must be cautious as to which hat he might be wearing when perforoming corporate duties.

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