A shareholder is a person or entity that owns shares in a business and can therefore be a vote-taker in major company decisions. They also make money through the growth of their share portfolio or through dividend payments from businesses. The rights and duties of shareholders are based on the number of shares they have, and they may be separated into categories such as minority and majority shareholders.

A person who owns over 50% of a company’s shares is a majority shareholder. It is typically the company’s founders, but it can also be a different company that buys more than 50% of the business’s shares. A majority shareholder has the power to make important decisions, and can choose who sits on a company’s board. They are also able to file lawsuits for types of shareholders in a business any wrongdoing by an organization.

You are considered a minority shareholder when you own more than 25 percent of shares in the company. You are entitled to vote on major company decisions however, you have no control over it. Minority shareholders are still able to take action against the company for wrongdoings it has committed, but they don’t have the same authority as the majority shareholders.

There are two broad types of shareholders in a business: common shareholders and preferred shareholders. Both types of shareholders are entitled to vote on crucial decisions and also decide who sits in the company’s board, but the type of shares you own determines your voting rights. Common shareholders hold the largest amount of votes and are entitled to receive dividends when the company makes a profit during the financial year but they don’t get a guaranteed rate of dividends as preferred shareholders do.