http://companylisting.info/2021/04/06/understanding-types-of-companies/
Shareholders are people who own shares in a company, and they profit from the company’s success. Shareholders can invest in a variety of ways as a shareholder, whether it is a private or public business.
A shareholder may sell their shares to another investor to receive a dividend. Capital gains are a consequence of an increasing company’s profits. Shareholders may be legal entities or individuals, and they may also be members of a corporation.
There are various kinds of shareholders and their rights and privileges depend on the type. Certain shares have voting rights and others don’t. Certain shares are also able to receive dividends in a different way than others. These rights are defined in the charter of the company or bylaws as well as in state laws.
The most common types of shareholders are common, preferred and institutional. Common shareholders are people who hold the common stock of a company. They are entitled to vote and can influence corporate decisions and issues. Dividend payments are based on the company’s earnings. Preferred shareholders, on other hand, have priority over common shareholders in terms of dividend distribution and have a higher claim on assets in the event of liquidation. Institutional shareholders comprise large corporations like hedge funds, pension funds, and mutual funds that hold large shares in a business.