Normally, shareholders of a company will be classified into 3 main types, including: common shareholders, preferred shareholders and founding shareholders. Each type of shareholder will have different characteristics and accompanying rights.
Founding shareholder
Founding shareholders are people or organizations participating in the process of establishing a company and contributing initial capital to start the company's operations. They are responsible for creating ideas, plans and establishing the company's organizational structure. Founding shareholders play an important role in building and developing the company from the initial stages.
Common shareholders
As the name suggests, they are the owners of the company's common stock. These individuals enjoy voting rights on issues related to the company. Furthermore, they can also exercise the aforementioned rights, including filing class action lawsuits against any matter that may harm the organization.
Preferred shareholders
On the other hand, preferred shareholders have priority over common shareholders when distributing the company's profits. Although they do not have the right to vote in matters related to the company's operating decisions, preferred shareholders are entitled to a fixed dividend rate, even if the said company's profits are declining. threatened.
Table comparing the differences between common shareholders and preferred shareholders
| Parameters | Common Shareholders | Preferred Shareholders |
| Dividend distribution |
Common shareholders are enjoy dividends generated from business profits.
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Preferred shareholders have priority over a common shareholder with respect to dividend distributions.
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| Voting rights | Common shareholders enjoy voting rights related to operational management decisions. company's activities. | Preference shareholders do not enjoy voting rights on company issues. |
| profitability | The distribution of dividends among common shareholders is carried out on an efficiency basis a company's operations in a particular year. For example, if a company incurs a loss in a given year, common shareholders also suffer a loss. Similarly, if it generates higher profits, shareholders are also entitled to receive higher dividends. |
Preference shareholders have the right to receive dividends at a fixed rate, not affected by the company's performance.
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Procedures when insolvent
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Common shareholders face high liability if a company declares a loss ability to pay and also risk losing their entire investment. |
During the period of insolvency, preference shareholders have the right to claim the company's assets.
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