What is share ownership?
A shareholding refers to all the shares in a company held by shareholders. Shares are ownership units in a company that give holders specific economic and legal rights.
Shareholders can be individuals or companies, and they can be of different types:
They hold the majority of the company's shares and therefore have greater decision-making power.
They hold less than half the company's shares and therefore have less decision-making power.
Institutional investors, such as pension funds, insurance companies, banks, etc.
Individuals who bought shares in the company
What is its role?
A company needs equity to operate and grow. One way of financing this is to open up the company's capital to investors. Subscribers receive a number of shares proportional to their contributions. Shareholders participate in the governance of the company, as their shares give them voting rights at general meetings.
Generally, one share is equivalent to one voting right, but in reality there are several types of shares: ordinary shares, preference shares, etc. Each company determines its own thresholds.
Share ownership serves several purposes:
Financing
Shareholding enables companies to raise funds by selling shares to investors. These funds can be used to finance expansion projects, capital investments, or to repay debts.
Governance
Shareholders have the power to make decisions that affect the company, by voting at general meetings or by choosing the directors who represent them. This ensures that the interests of the company and its shareholders are taken into account.
For listed companies :
Liquidity
A company's shares can be easily bought and sold on the stock markets, enabling shareholders to make gains when the share price rises.
Performance
The price of a share generally reflects thecompany 's performance and potential future. Shareholders and investors can use this information to assess a company's performance and make investment decisions.
How does it work?
- Companies can issue shares and raise funds on the financial markets; shares are securities representing ownership stakes in the company. Shareholders buy these shares, thus becoming owners of part of the company.
- Once they have issued shares, companies can then sell them on financial markets (such as stock exchanges). It is important to note that these shares are financial assets that can fluctuate according to the company's results and the evolution of the economy as a whole.
- Shareholders have rights, such as the right to receive a share of profits in the form of dividends, the right to attend shareholders' meetings, and the right to vote on important company decisions.
- Shareholders also have duties:
- Release of the contribution: payment following a promise
- Contribution to losses: each shareholder is jointly and severally liable
- Shareholders also have the option of selling or exchanging their shares on the stock market, either to other investors, to the public, or to the company itself (if it is in a financial position to buy back its own shares).
