The Rigts of Stockholders

The Rights of Shareholders

I. Introduction

Shareholders are the most powerful decision makers within a corporation; they determine the outcome of the direction in which a corporation will go and who will be appointed to carry out these instructions. Shareholders hold an annual meeting to elect directors to the Board of Directors. As well as other important matters that require attention but if there are special matters then a meeting can be held outside of the annual meeting. Shareholders also have the right to approve or disapprove of amendments to the articles of incorporation and the By-laws as we have read. Shareholders power also includes making non-binding recommendations regarding the governance of the corporation to the Board of Directors.

The Rights of Shareholders

II.

Body of Research Paper

A. How important are the voting rights of shareholders?

1. Shareholders voting rights are the most important as it their vote that elects the Board of Directors for the corporation. The Directors are chosen to carry out duties that represent the company.

B. How do shareholders invoke their rights in transfer of stock?

1. There are federal and state laws that govern how stocks are exchanged and distributed

in a corporation. A preferred stockholder with no voting rights may find an opportunity to transfer this stock for common stock with voting rights. If the shareholder has conversion rights they may transfer the preferred stock for common stock. Shareholders may also exercise their right to request the corporation repurchase their stock which is a shareholders redemption rights.

C. How are shareholders involved in the liquid assets of a company?

1. Shareholders have rights to the liquid assets of a corporation once it has dissolved. After the company has dissolved they must pay out their creditors and all owners of...