Shareholders are the beneficial owners of companies limited by shares. They can be referred to as ‘members’ and may also be PSCs of the company.
They provide financial security to the business, receive a percentage of profits, and have ultimate control over how the company is managed by the directors.
The typical role of a company shareholder involves:
- investing money in the business
- receiving a portion of company profits in relation to their shareholdings
- contributing to company debts up to the limit of their liability
- deciding which powers to grant to directors
- authorising the allotment and transfer of company shares
- setting the prescribed particulars (rights) attached to shares
- making decisions in exceptional circumstances where directors have restricted powers – for example, changing the company structure or name, altering the articles of association, and making changes to the shareholders’ agreement
- setting directors’ salaries.
- authorising dividend structures
- receiving a portion of surplus capital, if and when the company is dissolved
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