Shareholder Rights

An investor who purchases stock in a corporation becomes a shareholder and enjoys a number of significant benefits and rights. As with any investment, however, there is a risk, and shareholders can lose their investment under certain conditions. When an individual is determining whether to invest in a corporation, it is a good idea to consult with an Orange County business lawyer.

Orange County business lawyer

Rights and Benefits

Because ownership of corporations is distributed among its shareholders, an investor who purchases shares becomes a part-owner and thereby possesses voting powers. However, shareholders are not generally tied to the day-to-day operations of a company. Among shareholders’ rights and benefits are:

  • The right to vote on matters pertaining to the corporation
  • The right to review corporate books and records
  • The right to receive dividends when they are provided by the board of directors
  • The right to determine matters affecting corporate assets
  • Transfer of the stock
  • The right to sue the corporation if it is believed that the officers acted unlawfully or in ways that brought harm to the company
  • The right to part of the distribution when a corporation liquidates

An Orange County business lawyer can discuss further benefits, and assist in determining whether a particular company is a good investment.

The Downside

While shareholders in many cases stand to earn money on their investment, the opposite may occur as well. Sometimes even promising or established businesses fail; when this occurs, the shareholder may lose part or all of his/her investment.

For More Information

For further information on corporate investing, speak with an Orange County business lawyer. Call the Law Offices of Reed Aljian and Justin Daily for a consultation at (949) 861-2524.