Shareholder

A shareholder is a person or company that holds shares in a public limited company. These shares represent a part of the ownership of the company, which gives the shareholder certain rights, such as the right to dividends, the right to vote at general meetings and the right to a share of the company's assets in the event of its dissolution. Shareholders can be either private individuals or institutional investors and, depending on the number of shares held, have a greater or lesser influence on company decisions.

To become a Shareholder, you usually follow these steps:

1. Opening a securities account: First you need a securities account, which you open with a bank, an online broker or a specialized platform. This securities account serves as an account for storing and managing the shares.
2. Selecting shares: You then decide which companies you want to invest in. This decision should be based on a careful analysis, taking into account the economic situation, the business model and the future prospects of the company.
3. Buying shares: Once you have decided on specific shares, you buy them via the stock exchange or over-the-counter trading platforms. The purchase is usually made by means of a buy order, in which the desired number of shares is purchased at a certain price or at the current market price.
4. Monitoring and management: After the purchase, the shares are held in a custody account and their performance can be monitored. As a Shareholder, you receive regular information from the company, such as annual reports, and can participate in general meetings.

Through this process, you become a co-owner of the company and potentially benefit from its economic success.

Shareholders have a number of rights to which they are entitled as co-owners of a public limited company. These rights can be divided into two main categories: Participation rights and property rights.

Participation rights of a Shareholder

These rights enable shareholders to actively participate in Corporate Management and decision-making:

• Voting rights: Shareholders have the right to vote on important company matters at the Annual General Meeting, such as the election of the Supervisory Board, the discharge of the Management Board and Supervisory Board, capital increases or mergers. In most cases, the principle of “one share, one vote” applies.
• Right to participate in the Annual General Meeting: Shareholders have the right to participate in the Annual General Meeting. Here they can find out about the state of the company, ask questions and exercise their voting rights.
• Right to information: At the Annual General Meeting, shareholders have the right to request information from the Management Board on all matters relating to the company that are necessary to assess the items on the agenda.
• Right of challenge: Shareholders may challenge resolutions of the Annual General Meeting if they believe that they violate the law or the company's Articles of Association or significantly impair their interests.
• Right to special audit: Under certain conditions, shareholders can request a special audit by an independent auditor if there is a suspicion of mismanagement or irregularities.

Shareholder's property rights

These rights relate to the Shareholder's financial interest in the company:

• Dividend rights: shareholders are entitled to a share of the company's profits, which are distributed in the form of dividends if the Annual General Meeting so decides.
• Subscription right: In the event of capital increases, shareholders have the right to acquire new shares at a fixed price before other investors in order to maintain their shareholding quota.
• Right to liquidation proceeds: In the event of the dissolution or liquidation of the company, shareholders are entitled to a share of the remaining assets after settlement of all debts and liabilities.
• Right to sell freely: Shareholders may sell their shares at any time on or off the stock exchange, provided there are no contractual restrictions.

These rights enable shareholders to participate in the financial performance of a company as well as to exert influence on Corporate Management.

Shareholders not only have rights, but also certain obligations that they must fulfill as part of their participation in a public limited company. These obligations ensure that shareholders participate in the company in a responsible manner and that the stability and proper functioning of the company are maintained. Here are the most important obligations of a shareholder:

1. Payment obligation
   • Payment of the capital contribution: Shareholders are obliged to pay the purchase price for the shares they have acquired in full. This contribution represents the equity used to finance the company.
2. Duty of loyalty
   • Safeguarding the interests of the company: Shareholders must safeguard the interests of the company and may not abuse their rights to cause damage to the company. This also includes ensuring that they do not breach their duty of loyalty to the company in their conduct.
3. Duty to disclose shareholdings
   • Duty to disclose significant shareholdings: If a Shareholder exceeds certain thresholds (e.g. 3%, 5%, 10% of shares), they must report this to the company and the supervisory authorities. This disclosure obligation is intended to create transparency and prevent uncontrolled influence.
4. Duty of confidentiality
   • Confidentiality: Shareholders, especially those with access to internal information (e.g. major shareholders or members of the Supervisory Board), are obliged not to disclose confidential information to third parties without authorization or to use it for their own benefit.
5. Duty to participate
   • Attendance at the Annual General Meeting: While shareholders are not obliged to attend the Annual General Meeting, it is considered good practice, especially when important decisions affecting their interests are pending. Exercising voting rights is also part of what is expected of active shareholders.
6. Tax liability
   • Taxation of profits: Shareholders must declare any capital gains they earn, such as dividends or profits from the sale of shares, in their tax return and pay any tax due on them.
7. Participation in capital measures
   • Acting on capital increases: If the company carries out a capital increase, shareholders must decide whether to exercise or waive their subscription rights. This decision may affect their percentage share in the company.
8. Obligation to comply with the articles of association and laws
   • Compliance with company regulations: Shareholders must comply with the company's articles of association and applicable laws. This also includes complying with the resolutions of the Annual General Meeting, even if they do not agree with them.