A person (which may be a corporation) who owns a portion of a for-profit corporation. Also known as a stockholder; a shareholder has legal rights conferred by state law and are also contained within the bylaws of the corporation and a shareholders agreement if there is one. Rights typically include notification of annual shareholders meetings, ability to elect directors and receive a share of any declared dividends. In the strict sense of the term, a “shareholder” is a person who has agreed to become a member of a corporation or company, and with respect to whom all the required formalities have been gone through; e. p., signing of deed of settlement registration, or the like. A shareholder by estoppel is a person who has acted and been treated as a shareholder, and consequently has the same liabilities as if he were an ordinary shareholder.
Home » Law Dictionary » S » SHAREHOLDER