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Person or entity that owns shares or equity in a corporation.


The person or company that owns a share in a publicly-traded company or a mutual fund. The share represents a certain (usually very small) percentage of ownership in the company or the securities underlying the fund. Thus, a stockholder has the right to receive a portion of the company's profits in the form of dividends, and, depending on the type of share, may have a right to vote on matters pertaining to corporate governance. A person or company becomes a stockholder on the record date, that is, on the date that the share was bought. A stockholder is also known as a shareholder.



If you own stock in a corporation, you are a shareholder of that corporation.

You're considered a majority shareholder if you alone or in combination with other shareholders own more than half the company's outstanding shares, which allows you to control the outcome of a corporate vote. Otherwise, you are considered a minority shareholder.

In practice, however, it is possible to gain control by owning less than 51% of the shares, especially if there are a large number of shareholders or you own shares that carry extra voting power.


An individual or entity that owns shares of capital stock.
References in periodicals archive ?
However, I fail to see how either the greater availability of hedging instruments or the proliferation of new equity-like claims in corporate capital structures undercuts in any way the arguments in favor of use of the fictional diversified shareholder concept to facilitate shareholder wealth maximization.
Daniel Greenwood's 1996 Southern California Law Review article (78) is without question the definitive discussion of the fictional shareholder concept and its implications for corporate behavior.
Finally, Richard Booth in a The Business Lawyer article published in 1998 (82) compared the merits of the fictional undiversified shareholder concept with the fictional diversified shareholder concept.
87) However, the major concern that Booth expresses for the feasibility of the use of the fictional diversified shareholder concept is not the extensive data requirements of that approach with regard to industry-wide and economy-wide impacts, but instead the difficulty that directors would have in determining the precise extent and nature of their shareholders' diversification.
It is not entirely clear whether Booth would still favor the fictional undiversified shareholder concept over the fictional diversified shareholder concept in the sort of direct fiction-to-fiction comparison that I have made, although my strong surmise is that he would because of the interesting reasons that he gives for his conclusions.
Booth in his article also offers the interesting and counter-intuitive claim in support of the use of the fictional undiversified shareholder concept that even diversified investors would prefer directors to act as though they owed their fiduciary duties solely to undiversified shareholders.
My preference for the fictional diversified shareholder concept is predicated upon the assumed goal of best facilitating the narrow objective of actual shareholder wealth maximization, and best constraining directors from favoring their own interests and the interests of non-shareholder corporate stakeholders at the expense of the shareholders.
And, more importantly, not only would the investment choice made to maximize shareholder wealth on the basis of the fictional diversified shareholder concept often be different from the choice made on the basis of the fictional undiversified shareholder concept, it would also often be more in accord with the preferences of actual diversified corporation shareholders.
I have concluded by endorsing the fictional diversified shareholder concept as being the optimal fictional characterization for facilitating shareholder wealth maximization, as compared to each of the other alternative generic characterizations, and as compared to a hybrid characterization that assumed the existence of both undiversified and diversified shareholders.
Henry Hu also reached this conclusion as to the superiority of the fictional diversified shareholder concept in his 1990 UCLA Law Review article, (98) although he shortly thereafter retracted that position in his 1991 Texas Law Review article.
This is an absolutely devastating shortcoming of this characterization, (102) and that concept therefore should be discarded and replaced either by the fictional diversified shareholder concept I have recommended in qualified terms or by some other fictional shareholder characterization that also imposes more of a constraint on directors in favor of shareholder interests, or by directors discarding the use of such analytical fictions altogether and instead attempting to assess and balance the preferences of their corporation's actual shareholders.
It also demonstrates that any attempt to utilize even a slightly more nuanced and realistic hybrid model of public corporation shareholders--one that introduces greater realism only with regard to variations among shareholders in the extent of their investment diversification and not with regard to any of the other manifold and often more significant criteria that differentiate shareholders--immediately reintroduces the difficult political and philosophical questions that the fictional shareholder concept was designed to avoid.