Who is a Shareholder?

Published on December 16, 2025 | 3 min read

Although we know the famous business tycoons as owners of big companies like Reliance, Infosys or Tata Motors, do these tycoons actually own the company? The answer is, there is no single owner of any publicly listed company. The shareholders of the company are the owners and that shareholder could be you, your neighbour or even your grandmother. Let's understand who the shareholder is and what rights he has.

Who Becomes a Shareholder?

A shareholder is simply someone who has shares of the company in his name. When you buy shares, you are buying a small part of that company. It doesn't matter if you own one share or a thousand shares, you are still a shareholder and part-owner of that business.

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When you buy shares of, say, Asian Paints, you are not just buying a piece of paper or a number on your screen. You own a tiny portion of that entire company, its factories, products, profits and future growth. As the value of the company grows, the value of your share also grows in the same proportion. The converse is also true, as the value of the company goes down, so does the value of the share.

Different Types of Shareholders

Not all shareholders are the same. Some people buy just a few shares and hold them for years. Others trade thousands of shares daily. There are individual or retail investors and then there are institutional investors like mutual funds, insurance companies and pension funds that buy massive quantities of shares.

There are also promoters, who are the founders or major stakeholders who usually own a large chunk of shares of the company and have significant control over how it's run.

What Do Shareholders Actually Get?

Being a shareholder comes with some real perks.

Dividends

When a company makes a profit and decides to share some of it with owners, you get a dividend payment based on how many shares you hold. It's like getting a bonus just for owning a piece of the company

Voting rights

Companies hold annual general meetings where important decisions like who will be the board members, major business moves, executive pay and more. As a shareholder, you can vote on these matters. Sure, if you own 10 shares, your vote won't swing major decisions, but you still have a voice.

Growth

If the business does well, the share price generally goes up. That's called capital appreciation. Also, it is the main reason why many people become shareholders in the first place.

Why Do People Become Shareholders?

Most people buy shares for two main reasons, to make money and to beat inflation. Leaving cash in a savings account earning 3-4% interest means you are losing purchasing power when inflation is higher (in India, inflation has been around 5-7%). Historically, stocks have delivered better returns over the long run, though with more ups and downs along the way.

Some people become shareholders because they believe in a company's mission or products. And many see it as important for building long-term wealth.

How to Buy Shares?

Buying shares today is easier than ever. Open a demat account, do some research and you can buy shares in minutes. The shares you buy are delivered to you in digital format and get stored in your demat account. The entire process is digital, you do not have to visit any office or store any papers.

Shareholders are part-owners of companies, they earn through dividends and share price gains. There are different types of shareholders, like retail and institutional. All shareholders get ownership rights and there are risks involved.

About Author

Pradnya Surana

Sub-Editor

is an engineering and management graduate with 12 years of experience in India’s leading banks. With a natural flair for writing and a passion for all things finance, she reinvented herself as a financial writer. Her work reflects her ability to view the industry from both sides of the table, the financial service provider and the consumer. Experience in fast paced consumer facing roles adds depth, clarity and relevance to her writing.

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About Upstox

Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.