Shareholders have certain rights in the state of Texas. When they buy shares, they’re essentially buying partial ownership of a company, which means they have limited decision-making abilities. They can also sue the company in certain situations.
What rights do shareholders have?
One of the advantages of being a shareholder is that you can sell your stocks at any time and potentially make a profit. Even if you don’t make a profit, you can still make quick cash. According to business law, the company can’t do anything that prevents you from selling your shares.
Since you have partial ownership of the company, you can vote on major decisions during the company’s annual meeting. You can inspect the company’s books and financial records at any time, within reason. If the company decides to release more shares, you have the opportunity to buy more shares at a discount before they are available to the general public. You can even turn around and sell these shares for a profit afterward.
If one of the higher-ups in the company committed fraud, you have the right to begin business litigation against the company for damages. Some companies deliberately misrepresent their finances to avoid paying taxes or make a bigger profit, which can lead to lawsuits from shareholders.
How can you learn more about your rights as a shareholder?
Even if you’re not filing a lawsuit, you could talk to an attorney to learn more about your rights as a shareholder. You might be surprised by the level of involvement that you could have in the company. If you suspect that the company has committed fraud or another serious crime, you may want to talk to an attorney about filing a lawsuit. Otherwise, you might have to deal with damages and financial hardships because the company is compromised.