Syndicate
Rights Obligation Given to Shareholders
To be a shareholder signifies to be a partner or co owner of the company from which the shares come from. This implies for the investor to possess the fundamental rights of a partner:
- To assist and vote in the general council meetings: for its execution they will have to possess the determine number of share that are foreseen on the companies statutes. The number of votes of the shareholder depends on the existing proportion of share possessed against the share capital of the Company. However, the company may decide, the emissions of shares deprived of the rights to vote under the limits foreseen on the legislation of the company.
- To participate in the decisions taken on the general shareholders board meetings through the right to vote. So then, the shares permit you to participate in management of the companies in which you invest.
- The right to perceive dividends: in case the company has obtained a profit and the general board decides to distribute part of them to the shareholders, who will then receive their corresponding profits.
- You have to distinguish between dividend payable, the interim dividend and the supplementary dividend.
- The dividend payable is that which the general shareholders board meeting decides to pay to the shareholders (the accorded). The interim dividend is that which is paid before the general shareholders board meets and the supplementary dividend is the difference between the dividend payable and the interim dividend. However, a company may have profits but its statutes might estipulate that these have to be accumulated and be destining to the reserves. In this case there is no distribution between the shareholders.
- Preferential subscription rights: If a company decides to increase its capital with an emission of new shares, the shareholders have a preference over them at the time of acquisition.
- Transmissibility: If the companies are quoted on the stock exchange market, the shares may be transferred without any kind of condition or restriction. This is not the case for companies not quoted on the stock exchange market, where there is the possibility of conditioning.
Other minor rights that shareholders enjoy:
- Right to be informed
- Right to get separated from the partnership
- Right to impugn company agreements
In reference to the obligations of the shareholders we could emphasize on two of them:
- Payment: At the moment of the subscription of the shares he is obliged to pay out the contribution he has contracted.
- Responsibility: He is done responsible of, depending on the amount paid out, the debts and losses of the partnership.