What it means to be a shareholder

Issuing shares

To raise money to start or grow, a company may issue shares. How those shares are arranged, and who holds them, is managed through share allocations.

Rights and responsibilities of shareholders

As a shareholder you:

• aren't responsible for, and don't participate in, the day-to-day management of the company (unless you have authority from the company to do so), and
• have the right to a percentage of any distribution or dividend paid to shareholders, based on how many shares you own.

Voting at company meetings

Shareholders generally have the right to cast 1 vote for every share they hold at company meetings. Issues voted on can include:

• appointing or removing directors or auditors
• adopting, altering or revoking the company's constitution
• approving a major transaction
• approving a long form amalgamation
• putting the company into liquidation
• closing the company.

If a company fails

If a company goes into receivership and you haven't yet paid for your shares in full, you may be forced to pay the balance owing for those shares.

If a company goes into liquidation and sells its assets, you have the right to a proportion of the money that's raised from the sale, but only after creditors have been paid.

Registering shareholders

Every company must register details of its shares and shareholders on its own share register. Those details also appear on the Companies Register.

Get advice about buying shares

Investing in shares carries a level of risk. Information on the Sorted website may help you make an informed decision about buying shares.

Other guides in

Shares and shareholders

• Registering a shareholder
• Filing director and shareholder consent forms
• Issuing shares in a company
• Managing share allocations
• Updating a shareholder's details
• Distributions to shareholders

Other help topics