Shareholders are either individuals or corporations who invest funds in a company by purchasing shares of stock. They make a profit or lose money from their investment based on performance of the company as well as its ability to pay dividends. They also gain from capital appreciation, when the value of their shares rises over time. The rights and privileges of shareholders might vary based on state laws and the terms of a corporation's charter or bylaws.

There are two types of shareholders in a company such as common stockholders and preferred shareholders. Common shareholders are massive in number and are entitled to vote at shareholder meetings. They can check reports and be part of the decision-making process. Preferred shareholders can receive preferential dividends and have a higher priority than ordinary shares during liquidation.

The term "shareholders" could be used to describe people who own debentures and bonds issued by a company. These are debt instruments that provide investors a certain amount of return. These investors are generally not involved in the day-to-day operations of the business, but their interests may be represented in the governance committee.

Strategic shareholders are investors who buy shares in a company to accomplish the specific goal of the company like acquiring new technologies or markets. This registering your business name kind of shareholder is a key component of a family company as they comprehend the project's scope and appreciate the possibilities of it and are willing to take risks in order to get a return on their investment.