What Rights Do Shareholders Have in Corporations?
If you become a shareholder for a large corporation, you may expect to get a lot of a return from it. However, this may not always be the case. There may be various levels of shareholders and different benefits. Therefore, discovering what rights do shareholders have can be tricky.
You must first know which level you fall into. Do you have bonds within the corporation? Do you have preferred stock? Are you a common stockholder? If you have common stock, then you will have fewer benefits and rights, in some cases.
If you are curious about your rights or want to know which stockholders maintain what rights, DoNotPay can help. We can help you understand your rights and ensure that your rights are being respected by the corporation. If they aren't, we can also help you get the rights that you deserve.
What Are the Five Basic Rights of Shareholders?
Even as a common shareholder, you do have the right to five things. They include the right to:
|Your Rights:||What They Mean:|
|Transfer Ownership||As an owner of stocks, you have the right to sell or transfer ownership of it as you see fit to do.|
|Vote||If there are going to be major changes within the corporation, you have the right to express your opinions and cast your vote.|
|Dividends||If the company decides to pay out in the form of dividends, you are entitled to your share of the profits, even if you are just a common shareholder within the company.
Dividends can be:
|Inspect Corporate Documents||This means that as a shareholder you have the right to view financial information, company bylaws, and other company-specific information upon your request.|
|Sue for Wrongful Acts||If you discover that the company you have invested in has lied or overstated its income potential, you can sue the company for it.
You should keep in mind that different states may provide you with different benefits. In order to ensure that you are getting everything you deserve, you may have to write a demand letter to the corporation expressing that you want to know your rights.
With that in mind, you should also know that there are some things that are not one of the basic shareholder rights. For instance, if you are a common stockholder, you may not have the right to receive a minimum amount of dividends from the corporation in every state.
Why Are Stockholders' Rights Important to Investors?
One of the main reasons that shareholder's rights are important to any investor, big or small, is that it will protect them from poor management and lost income because of a corporation's deceit. As per Section 220 of the Delaware Corporation Law, you can demand to see financials as long as you have a proper purpose for doing so.
This means you can request information if you feel that the company is:
- Making Improper Transactions
- Wasting Resources
- Not Being Managed Properly
Basically, anything that they may be doing wrong within the company, which could ultimately cost you. The only catch is you must provide some burden of proof before demanding the information.
How to Ensure You Get All Your Legal Rights
Often you may have a vague understanding of your rights as a shareholder when you purchase your stock. However, this does not always mean you get everything you deserve, especially when every state and country has its own guidelines.
It is recommended that before you invest, you research the corporate governance policies for that corporation. They will give you a better understanding of how that company will treat you as a stockholder.
From there, if you do not feel that you are being treated fairly, you will have to demand that they uphold their end of the deal. To make your request official, you should put it in writing and hand a copy to each of the company leaders.
If you still feel that you are being ignored or aren't getting what you should from the corporation, it will be up to you to contact a lawyer. This will increase your cost and potentially take up a lot of your time.
When it comes to concerns about your financial situation as a stockholder, you may not want to deal with the wait and added cost. If this sounds like you, know that DoNotPay is an option you may also consider turning to.
DoNotPay Can Help You Get Your Shareholder's Rights
Knowing and understanding what rights stockholders have in a corporation is not always easy. DoNotPay is the world's first online robot lawyer and because of that, we can help you deal with virtually any situation you may be dealing with as a shareholder.
We can tell you which shareholders have bank rights and whether it applies to you or not. We can also help you understand "What rights do shareholders and board members have in a company?" if you are unsure about the rules in your state. Best of all, we can help you ensure you get the rights you deserve quickly, easily, and securely.
Whether trying to figure out "What are the rights of shareholders?" or filing a Delaware Code 220 request, we have you covered in just 5 easy steps:
- Search Delaware Code or Stock Inspection on DoNotPay.
- Confirm that the company you are hoping to inspect is a Delaware Corporation and that you are a stockholder.
- Tell us why you are requesting the information and what you plan on doing with it.
- Specify the names or types of documents you are requesting.
- That's it! DoNotPay will generate the formal request letter on your behalf and send it to the company.
DoNotPay Can Help with Delaware Code 220 Laws and More
DoNotPay is a lawyer that is available 24/7, so we are always available to help you get through every situation. Our robot lawyer can help you determine what are the rights of stockholders and so much more.
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To learn more about these services and others that we offer, you simply need to visit us online at DoNotPay.