What is a shareholder?

In simple terms the shareholders own part of the company. You can create shares that do not have any rights of ownership, for example dividend shares, but in general most shares own a percentage of the company.

When there are more than one shareholder in a limited company the shares define ownership. For example two owners may hold 50 shares each, or you could create a 70/30, 60/40 split etc.

Subject to the rights attached to the shares and the company’s articles of association shareholders typically have the following rights-

• To attend general meetings
• To vote at meetings
• To receive a share of the company’s profit
• To view the company’s statutory books
• To receive a copy of formal documents like the accounts and annual reports
• To receive any money from the company being wound-up or dissolved

When forming a company using Simple Formations you will be asked to add at least one shareholder. You can then create and issue differnet types of share to each shareholder.