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A Shareholder is a person or entity that owns a proportion of a limited company. They may receive a share of the profits and this share is called dividends.

More detail:

A Shareholder is a person or entity that owns a proportion of a Limited Company's stock. A Shareholder is entitled to a portion of the company's profits, known as dividends. They have the right to vote on important company decisions, such as electing board members.

There are two main types of Shareholders. Ordinary Shareholders are entitled to vote and receive dividends, but preference Shareholders have priority over ordinary shareholders when it comes to receiving dividends and getting their money back if the company is liquidated.

Most majority Shareholders are company founders. These majority Shareholders often have majority voting power so have large control over the running of the company.

Sole Traders and partners in a Partnership do not count as Shareholders.

If more than the Dividend Allowance is earned from receiving dividends, dividend tax will need to be paid on this amount above the allowance. Capital Gains tax will be owed if shares are sold for a profit and the profit is above the Capital Gains Tax Allowance.

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