The company is majorly run by company directors but every individual shareholder has a part in the company. Since all shareholders have invested in the company, they all have legal rights and liabilities. While the assets are owned by the company, a shareholder can indirectly influence the running of the company by practicing the legal rights. Sometimes, shareholders want to maintain privacy and so, a nominee shareholder is hired. Keep reading to find out if this nominee shareholder has any say in the company or not.
The authority of a shareholder
A shareholder has some general rights that every kind of company must offer. Other than, the minor differences depending on the nature and origin country of the company. The details of rights of shareholders of a company can be found in the company constitution. In general, every shareholder has the right to attend company meetings. They can also vote in important decisions such as choosing the company director. Shareholders can also sell their shares and shift ownership. However, this right varies a lot in different companies.
The shareholders of a company can sue the company in case of illegal actions. The company can also sue its shareholders if something unlawful is carried out. Since these people have invested in the company, they can demand company reports. All announcements must be communicated to the shareholders too. In issues like merging, de-merging, share buybacks, and any other matters regarding shares, shareholders have the right to speak up and have a say. The method and degree of this authority may vary depending on the amount of shares of every individual.
Liabilities of the shareholder
Although the shareholders are a major part of the company and also have a degree of say in how it runs, the company’s liabilities do not affect the shareholders directly. The obligations of the company are very different and of no concern to the shareholders. However, every shareholder has a few obligations too. Once again, these mostly depend on the company’s policies. The amount of shares also plays a role in the degree of responsibilities of a shareholder. While the exact details may vary, here is a general overview of what to expect.
The shareholders must pay all and any dues related to their shares on time. Similarly, all shareholders are obligated to abide by all the rules and regulations of the company. Anything mentioned in the shareholders’ agreement must be followed. Breach of any clause can lead to outcomes decided by the company. In some cases, shareholders are also given the duties of a director. If this is so, they must fulfill the responsibilities of both roles. A nominee, on the other hand, has to act as a shareholder without actually interfering in company matters.
A nominee shareholder cannot practice any of these rights. As a hired nominee, this person has to sign a declaration of trust which clearly states that no rights are granted to the nominee shareholder. The actual shareholders can continue enjoying all these rights legally, without having to have their names mentioned in official records.