Who are the individuals or entities that own shares in a company?

Study for the NCEA Level 1 Business Studies Test. Engage with interactive questions, complete with hints and detailed explanations. Prepare effectively for your exam!

The individuals or entities that own shares in a company are known as shareholders. Shareholders hold ownership stakes in the company and have a claim on a portion of its assets and earnings proportional to the amount of shares they own. This ownership entitles them to dividends if declared, as well as voting rights in certain company decisions, such as electing the board of directors.

Understanding the role of shareholders is crucial, as they play a significant part in a company's governance and financial performance. Their investment decisions can directly influence the company's strategies and future growth prospects.

While stakeholders, directors, and investors can have relationships with a company, they do not necessarily own shares directly. Stakeholders include anyone affected by the company's operations, which can encompass employees, customers, suppliers, and the community, not just those who own shares. Directors are responsible for the management of the company and may or may not own shares, depending on their situation. Investors are a broader category that includes anyone who puts money into a venture, which does not specifically imply ownership of shares. Shareholders, however, specifically denote those who own shares and have the rights and responsibilities that come with that ownership.

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