rights of a share holder
Answers
Answer:
common Shareholders' Main Rights
Voting power on major issues. ...
Ownership in a portion of the company. ...
The right to transfer ownership. ...
Entitlement to dividends. ...
Opportunity to inspect corporate books and records. ...
The right to sue for wrongful acts
Explanation:
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Answer:
Rights
Explanation:
Rights are
1 Right to Vote
The right to vote is the most important right a shareholder has. Companies Act 2013 recognizes the following types of voting: Voting by showing hands, Voting is done by polling, voting is done electronic means, voting is done through postal ballot.
This right enables shareholders to participate in corporate decision-making. Their voting power includes the right to appoint directors, the right to make proposals, the right to vote for structural changes such as mergers and acquisitions, or liquidation.
Following a procedure mentioned in the Companies Act 2013, the shareholder also has a right to appoint a proxy on his behalf when he is unable to attend the meeting. Though the proxy is not allowed to be included in the quorum of the meeting in case of voting.
2. Legal Action Against Directors
According to the rules laid down in the Companies Act 2013, shareholders can bring legal action against a director if any act was done by the director in any manner which is prejudicial against the affairs of the company, commits fraud, any act is done which is beyond the law or against the constitution, when the assets of the company are being transferred at an undervalued rate, act done in mala fide manner, when there is a diversion of funds of the company.
3. Right to Call for General Meetings
Shareholders have the right to call a general meeting. Annual General Meeting is an annual gathering of a company’s shareholders. Here, the directors of the company present the shareholders of the company’s annual report and comment on its performance over the year. Here, shareholders may elect new directors, discuss directors’ remuneration, and ask questions regarding the company moving forward. They also can approach the Company Law Board for the conduction of general body meeting if it is not done according to the statutory requirements.
4. Right to The Dividend
The Company’s shareholders have the right to a share in the profit reflected in the annual, stand-alone financial statements audited by an independent auditor and approved by a resolution of the General Meeting to be paid out to the Company’s shareholders (the right to dividend).
5.Appointment of Directors
An ordinary resolution is required to be passed by the shareholders for the appointment of directors. Shareholders also can challenge any resolution passed for the appointment of a director in the general body meeting.
6. Right to Dispose of Shares
The Company’s shareholders have the right to dispose of Shares. The disposal of Shares includes the sale (transfer of ownership) and other forms of disposal, including the establishment of a pledge, the right of use, or lease of Shares.
7. Right to Inspect Registers, Books, And Financial Records
Shareholders are the main stakeholders in a company, they have the right to inspect the accounts register and also the books of the firm and can ask questions about the same if they feel so. shareholders have the right to inspect a company’s books and records. This is so that the shareholder knows how well the company is doing. The company may do this by providing audited financial statements or financial reports to the shareholders.
8. Pre-emptive Right
The Company’s shareholders have the priority right to subscribe for new shares in the Company also in the case of an issue of securities convertible into shares in the Company or incorporating the right to subscribe for shares of the Company. A resolution adopted to increase the Company’s share capital should set the date of determining the Company’s shareholders’ pre-emptive right to new Shares (the pre-emptive right record date
9. Winding Up of The Company
Before the company is wound up the company has to inform all the shareholders about the same and also all the credit has to be given to all the shareholders.