Depending on the class of stock stockholders are granted special rights.They are- If a company goes insolvent and has failure to pay the loans the shareholders are not legally responsible to pay that.Tags: Action Research Sample PaperPersuasive Essay For Animal RightsHow To Write An Argumentative Essay SampleThesis Statement Examples For Compare And Contrast EssaysTuck 2011 EssaysPhd Thesis Latex DedicationPassion For Economics EssayEthical Case Studies In PsychologyCigarette Smoking Is Injurious To Health EssayEssays About Childhood Events
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Though the company is considered a legal person, thus it owns all its assets itself.
The Shareholders do not have the right to use a company’s building, equipment, materials, or other assets.
A large percentage of ownership of shares does not give the whole power to the shareholders.
For that, in the areas of insurance is taken with the name of the company and not the name of main shareholder.Instead, there are both “communities of interest” and “conflicts of interest” between stockholders (principal) and management (agent).This conflict is referred to as the principal/agent problem.They become major players in the long-term investment market.Such as- insurance companies, banks, pension funds, and investment companies.Owning shares does not mean responsibility for liabilities.However, all money obtained by changing assets into cash will be used to pay back loans and other debts first, but the shareholders cannot obtain any money until creditors have been paid. They are- Common stock- Common stock does not have a fixed value.Preferred stock – owners of preferred stock have first claim to a company’s profits and assets. Redeemable stock allows a company to repurchase it at some point, whereas convertible stock enables stockholders to exchange preferred stock for common stock.Shareholders are generally classified as individual investors or institutional investors.Individual Investors – are those who invest their own money.Institutional Investors- are those organizations that invest the money of others.