What is a stockholder? - AccountingCoach

What is a stockholder? What is a stockholder? For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com. Read more → Author: Harold Averkamp, CPA, MBA Definition of Stockholder A stockholder (also known as a shareholder) is the owner of one or more shares of a corporation’s capital stock . A stockholder is considered to be separate from the corporation and therefore has limited liability for the corporation’s obligations. Examples of Stockholders An owner of a corporation’s shares of common stock is referred to as a common stockholder . The common stockholders elect the corporation’s board of directors and will vote on certain transactions such as merging the corporation with another corporation. Generally, it is the common stockholders who become wealthy when a corporation becomes increasingly successful. In addition to common stock, some corporations also issue preferred stock. The owners of the shares of preferred stock are known as preferred stockholders (or preferred shareholders). The preferred stockholders usually accept a fixed cash dividend that will be paid by the corporation before the common stockholders are paid a dividend. In exchange for this preferential treatment of dividends, the preferred stockholders typically forego the potential financial gains that the common stockholders might enjoy. The amounts paid to the corporation by the original stockholders are reported as paid-in (or contributed) capital within the stockholders’ equity section of the corporation’s balance sheet . Join PRO and Perform Better At My... Accounting job Watch Bookkeeping job Watch Job interview Watch Small business Watch Class / students Watch Related Questions What is the difference between stockholder and shareholder? What is the difference between stockholder and stakeholder? What is preferred stock? What is common stock? What are the journal entries for a stock split? What is the difference between stock dividend and cash dividend? Related In-Depth Explanations Stockholders' Equity Join PRO to Track Progress Mark Complete Bookmark Feedback Please report anything unclear, incorrect, or missing. URL: Submit Feedback No Thanks Close WATCH NOW Advance Your Career with Our PRO Training Perform better at my accounting job Watch Video Perform better at my bookkeeping job Watch Video Get hired in a new position Watch Video Understand my small business Watch Video Pass my class Watch Video Features Free PRO Lifetime Access (One-Time Fee) Explanations Quizzes Q&A Dictionary Bookkeeping Video Training Financial Statements Video Training Visual Tutorials Quick Tests Quick Tests with Coaching Cheat Sheets Flashcards Crossword Puzzles Word Scrambles with Coaching Bookkeeping Study Guide Managerial and Cost Accounting Study Guide Certificates of Achievement Bookkeeping Certificate of Excellence Business Forms Printable PDF Files Bookmarks, Highlights, and Notes Progress Tracking Motivational Badges and Points Motivational Medal Rankings Motivational Activity Streaks Public Profile Page of Achievements Dark Mode About the Author For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com. Learn More About Harold Read 3,034 Testimonials PRO for Teams Easily add new users and team admins Monitor individual user progress and grades Monitor team progress and compare users View average grades and find problem areas Monitor recent activity and user achievements Learn More Before you go... Get $20 Off Our PRO Materials URL: Claim My Discount