Advantages and Disadvantages of Share Ownership

• Advantages
• right to dividends and capital gains
• right to sell shares to anyone else.
• pre-emptive right, that is when the company issues new shares, the shareholder has the right to buy a percentage of the new shares thet equals their existing share ownership in the company.
• a right to vote at the annual general meetin
• the right to control the company, if enough shares are owned.
• Disadvantages
• shareholders bear all the risk of the company
• only receive a dividend if the firm is profitable
• shareholders are paid out last in the event of liquidation
• receive dividends only when declared by the board of directors

Written by : Abdul Hadi Jusoh