A shareholder enjoys a number of rights and powers in exchange for their investment in the company. Here we look at the role a shareholder, as well as a shareholder’s rights and liabilities.

Shareholders' Rights

A shareholder is an individual, a company, or an institution that owns a number of share(s) in a company. As they are also considered as the company’s owner, they are to enjoy the benefits of the company’s successes in the form of increased common stock valuation. However, if the company does poorly and the share price of a company’s stock goes south, the shareholders can end up losing money.  

 

Types of Shareholder in Singapore

Essentially, there are 2 types of shareholders – Shareholders with voting rights and shareholders without voting rights.

All shareholders will be remunerated by dividends and different class of shares offered by the company shares, which are usually proposed by the Board of Directors, and subsequently approved by the shareholders.

 

Shareholder Rights in a Singapore Company

As part owner of a company, and perhaps also part of the management of the company, shareholders have their respective rights over the companies and its activities. For example, their rights includes,

 

Shareholder Rights to Attend and Call for Meetings

Shareholders have the right to be present at the company’s annual general meetings (AGMs). Under Singapore Company Law, two or more shareholders, who own at least 10% of the shares of the company, can call for the extraordinary general meeting (EGM) on a case by case basis.

  • Right to vote for:
  • Appointing and removing auditors Electing a new director Amending the company constitution  Adding of the exiting share capital  Changing of the company name
  • Right to be treated fairly

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E A S I E R • F A S T E R • B E T T E R

This comes into effect under section 216 of the Companies Act, and to be brought to the court of Law, whereby if,

  • The company or the directors’ actions are oppressive against the interests of one or more of its shareholder(s). Any act of the company has been done or is threatened or that some resolution of the members, holders of debentures or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or holders of debentures Rights to company’s dividends
  • The directors of a company are required to recommend the payment of dividends if the company makes any revenue Rights to wind up the company

This is permissible when,

  • Any of the director(s) of a company acted in their self-interest to the shortfall of the company The company is being used for any unlawful activities The company is conducting a multi-level marketing, Ponzi structured business or pyramid scheme
  • Rights to company assets

All shareholders have rights to a company’s’ assets in any event of misfortune. Ordinary shareholders will still have the last claim on anything remaining, after debt has been cleared and priority given to all preference shareholders.