Explain the role of Shareholders in a company - Leaving Cert Business - Question A - 2007
Question A
Explain the role of Shareholders in a company.
Shareholders are the owners of a company. They invest in a company by buying shares and in return, they receive a div... show full transcript
Worked Solution & Example Answer:Explain the role of Shareholders in a company - Leaving Cert Business - Question A - 2007
Step 1
Shareholders' Investment
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Answer
Shareholders invest capital into a company by purchasing shares, providing the necessary funds for the company's operations and growth.
Step 2
Ownership and Voting Rights
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As owners, shareholders have the right to vote at the AGM. Each share typically provides one vote, allowing shareholders a say in key decisions, including the election of the Board of Directors.
Step 3
Profit Entitlement
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Shareholders are entitled to a portion of the company's profits, usually distributed as dividends. This return on investment incentivizes shareholders to support the company.
Step 4
Limited Liability
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Shareholders have limited liability, which protects their personal assets. They are only liable for the company's debts up to the amount they have invested.
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