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.

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.