Definition of Stockholder or Shareholder

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What is a stockholder or shareholder?

A stockholder is an individual, company or any other entity who owns at least one or any number of share of a corporation’s capital stock.

Is there any difference between stockholder and shareholder?

The answer is NO. Both are same.

In the United States, people love to name by stockholder. But in British English, they are quite happy with shareholder.

Are a Corporation and stockholder separate?

Yes, though a stockholder owns a part of the corporation, both are different and has separate status.

As a result, stockholders will have limited liability to corporation’s obligations.

It’s also possible to have only one stockholder of a corporation or company. But practically, in case of corporations it’s very rare.

Types of stockholders

Generally, a corporation has two types of stockholders.

  • Common stockholders
  • Preferred stockholders

Common stockholders are those who own a corporation’s common stock. In fact, they are the original owner of the corporation. If a corporation grows big then the common stockholders benefited the most. Common stockholders take part in the corporation’s decision making.

Sometimes corporations issue preferred stock. The owner of the preferred stocks is referred to Preferred stockholder. Preferred stockholders don’t have much influence over corporations’ decision making.

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