A shareholder is an individual or entity that owns shares in a business and is therefore able to take part in major company decisions. They can also earn a profit through the appreciation of their share portfolio or through dividend payments from a business. Shareholders' rights and responsibilities are determined by the number of shares they own. They are divided into categories such as majority and minorities.

A majority shareholder is someone who has more than 50 percent of the shares in a business. It is typically the company's founders, but it can also be an organisation which purchases more than 50 percent of the shares in the business. A majority shareholder has the right to vote on important decisions and decide who is on the company's board. They also have the option to bring suit against the company for any wrongdoing that was committed by it.

If you own more than 25 percent of the company's shares that means you're a minority stockholder. You are able to vote on key company decisions however, you don't have much influence over it. Minority shareholders are still able to sue the company if they commit any wrongdoing but they do not have as much power as majority shareholders.

There are two main types of shareholders in a company which are called common shareholders and preferred shareholders. Both types of shareholders are entitled to vote on major decisions and decide who sits on the company's board, but the type of shares you hold determines your voting rights. Common shareholders have the highest amount of votes and are entitled to receive dividends when the business earns profits for the financial year, however, they don't receive an assured rate of dividends as preferred shareholders do.

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