Shareholders' rights

The right to attend shareholders meetings and to vote on major issues. Voting power includes electing management and proposals for fundamental changes affecting the company such as investment strategy, remuneration strategy, dividend payment, mergers, or liquidation of the company. Voting usually takes place at the company’s annual meeting. However, for Romanian companies there is a practice to have several shareholders’ meetings during the year. If shareholders cannot attend phisically, they can do so by proxy or mail in their vote (in original wet ink signed or with electronic signature). 

The ownership right. Usually, your ownership in a company is not a public information. Detailed ownership and data are available when a threshold is hit (usually over 5% of the company’s voting rights). When business thrives, shareholders own a piece of something that has value. As these assets generate profits and as the profits are reinvested in additional assets, shareholders see a return as the value of their shares increases as stock prices rise. The right to transfer ownership means shareholders are allowed to trade their stock on a stock exchange. The right to transfer ownership might seem mundane, but the liquidity provided by stock exchanges is important. If an investor owns a house, it can take months to convert that investment into cash. Because stocks are liquid, investors can move their money into other places in few days.

The entitlement to dividends and other types of cash or stock distributions. Along with a claim on assets, investors also receive a claim to any profits the company pays out in the form of a dividend and other types of cash or stock distributions. 

The right to be informed. Shareholders have the right to receive information on the companies that they invest – they may inspect the company’s registers, financial statements the reports of the Board and of the auditors.  

The right to sue the management for wrongful acts. Suing the management of a company typically takes the form of a shareholder action lawsuit.