Stock

:See stock (disambiguation) for other meanings of the term stock

Shareholder rights

Although owning 51% of shares does mean that you own 51% of the company and that you have 51% of the votes, the company is considered a legal person, thus it owns all its assets, (buildings, equipment, materials etc) itself. A shareholder has no right to these without the company's permission, even if that shareholder owns almost all the shares. This is important in areas such as insurance, which must be in the name of the company not the main shareholder.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In most countries, including the United States, boards of directors and company managers have a fiduciary responsibility to run the company in the interests of its stockholders. Nonetheless, as Martin Whitman writes:

Related Topics:
United States - Boards of directors - Managers - Fiduciary - Martin Whitman

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

:"...it can safely be stated that there does not exist any publicly traded company where management works exclusively in the best interests of OPMI stockholders. Instead, there are both "communities of interest" and "conflicts of interest" between stockholders (principal) and management (agent). This conflict is referred to as the principal/agent problem. It would be naive to think that any management would forego management compensation, and management entrenchment, just because some of these management privileges might be perceived as giving rise to a conflict of interest with OPMIs."

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Even though the board of directors run the company, the shareholder has some impact on the company's policy, as the shareholders elect the board of directors. Each shareholder has a percentage of votes equal to the percentage of shares he owns. So as long as the shareholders agree that the management (agent) are performing poorly they can elect a new board of directors which can then hire a new management team.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Owning shares does not mean responsibility for liabilities. If a company goes broke and has to default on loans, the shareholders are not liable in any way. However, all money obtained by converting assets into cash will be used to repay loans, so that shareholders cannot receive any money until creditors have been paid.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~