Table of contents
- What is a shareholder?
- What are the obligations of a shareholder?
- What are the rights of a shareholder?
What is a shareholder?
Shareholders are holders of shares in a stock corporation (AG), limited partnership (KGaA) or Societas Europaea (SE). As a rule, they have voting rights and a say in a company's Annual General Meeting. Individuals or investment companies can vote on resolutions. This can sometimes steer the long-term strategy and day-to-day business of a company in certain directions. In principle, however, the German Stock Corporation Act (AktG) regulates all rights and obligations of shareholders on the basis of the absolute principle of equality.
What are the obligations of a shareholder?
Shareholders enter into various obligations when they purchase shares. Shareholders are obliged to pay the public limited company an amount that does not exceed the nominal value of the shares in accordance with the articles of association or a higher issue price. In addition, they may be obliged to make contributions in kind in accordance with the company's articles of association. However, a shareholder is only liable for the company's debts if he receives his contribution back.
One of the most important duties of shareholders is the duty of loyalty. Shareholders must consider the interests of the company and may not enrich themselves at its expense. Further obligations may arise from the articles of association of the AG. For example, a holding period may be stipulated during which the shares may not be sold.
What are the rights of a shareholder?
As a shareholder, every shareholder is entitled to a share of the profits corresponding to their shareholding, i.e. a dividend. If the public limited company is dissolved, the shareholder is entitled to the liquidation proceeds corresponding to his shareholding. In addition, the shareholder has a right to information and, above all, a right to vote at the general meeting of the public limited company. Furthermore, they have the right to challenge resolutions of the Annual General Meeting and, under certain circumstances, certain minority rights, with the help of which, for example, a certain number of shareholders can force an Extraordinary General Meeting. In general, shareholders have a so-called subscription right when new shares or bonds are issued.
