Corporations Shareholders Law and Legal Definition

A shareholder is an owner or investor in a corporation. The benefits of being a shareholder include receiving dividends for each share as determined by the board of directors, the right to vote (except for certain preferred shares) for members of the board of directors, to bring a derivative action (lawsuit) if the corporation is poorly managed, and to participate in the division of value of assets upon dissolution and winding up of the corporation. Shareholders may attend annual meetings or special meetings scheduled at a time other than the annual meeting that are called for a specific purpose, such as to vote on proposals to changes in the corporate charter. A shareholder should have his/her name registered with the corporation, but may hold a stock certificate which has been signed over to him/her. Before registration the new shareholder may not be able to cast votes represented by the shares.