A stockholder, also called a shareholder, is a person who owns stock in a corporation.
The stockholder has several rights; including the right to vote for board members, the right of receiving interest and dividends from the company, and the right of bringing a lawsuit against the corporation or the board members. If the board members disregard corporate formalities, are negligent in some capacity, or if the corporation is facing issues like thin capitalization, the stockholder could utilize a lawsuit to pierce the veil of the company against the shareholder who dominates corporate policy or commits a fraud or wrong that causes injury with the control of the company, according to the Lowendahl Test established by Lowendahl v. Baltimore Ohio R.R. Co.
[Last updated in March of 2022 by the Wex Definitions Team]
- Keywords