A shareholder, also known as a stockholder or equity holder, is an individual, institution, or entity that owns shares or equity in a corporation, entitling them to ownership rights, voting privileges, dividends, and a residual claim on the company's assets and earnings. Shareholders invest capital in a company by purchasing its common or preferred stock, becoming part-owners of the business and participating in its financial performance and governance. Shareholders have the right to vote on corporate matters, such as electing the board of directors, approving mergers or acquisitions, and ratifying significant business decisions. Shareholders may receive dividends as a distribution of profits or capital gains from selling their shares at a higher price than their purchase cost. Shareholders' equity represents the residual value of a company's assets after deducting liabilities and reflects shareholders' claims on the company's net assets in the event of liquidation. Shareholders play a crucial role in corporate governance, influencing strategic decisions, executive compensation, and company policies through their voting power and engagement with management and board members.