Stockholder information: Overview, definition, and example
What is stockholder information?
Stockholder information refers to the details and data related to individuals or entities that own shares (stocks) in a company. This information typically includes the names of stockholders, the number of shares they own, their voting rights, and any dividends or financial benefits they are entitled to receive. It may also encompass other details, such as the stockholder’s contact information or the type of shares held (e.g., common or preferred stock).
Stockholder information is important for companies to manage shareholder communications, ensure regulatory compliance, and facilitate decision-making processes, such as voting in annual meetings or other corporate actions.
Why is stockholder information important?
Stockholder information is important because it helps a company maintain transparency with its investors and comply with legal and regulatory requirements. For example, publicly traded companies are often required to disclose certain stockholder information to the Securities and Exchange Commission (SEC) or other regulatory bodies to ensure fair and accurate reporting.
For stockholders, this information is important for tracking their investments, understanding their rights, and making informed decisions about their shares, such as voting in corporate matters or deciding whether to sell their stock. It also helps stockholders stay informed about the financial health and governance of the company.
Understanding stockholder information through an example
Imagine you own 100 shares of a company called ABC Corp. As a stockholder, you have the right to vote on key matters, such as the election of the board of directors or approval of corporate policies. The company keeps track of your stockholder information, including the number of shares you own and your contact details. This information is used to send you annual reports, dividend payments, and invitations to shareholder meetings.
For example, if ABC Corp. decides to issue a dividend of $1 per share, the company will use your stockholder information to ensure you receive $100 (100 shares x $1). If a vote is held at the annual general meeting regarding the appointment of new directors, the company will use your information to count your vote based on the number of shares you hold.
Example of stockholder information clause
Here’s an example of how stockholder information might be referenced in a corporate policy or agreement:
“The Company shall maintain accurate and up-to-date records of all stockholders, including their names, addresses, number of shares owned, and any other relevant information necessary for the proper administration of shareholder rights. This information will be used for the purposes of issuing dividends, sending notices of meetings, and enabling stockholders to exercise their voting rights.”
Conclusion
Stockholder information is essential for both companies and investors. For companies, it ensures compliance with regulations, transparency in communication, and proper shareholder management. For stockholders, it provides the necessary details to track investments, exercise voting rights, and receive dividends or other financial benefits. Understanding how stockholder information is managed helps both parties maintain a clear and effective relationship in the world of corporate governance and investment.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.