What is a shareholder and what rights do shareholders have?
Last updated · General guidance, not legal or tax advice
A shareholder (also called a member) owns part of a limited company by holding its shares. Depending on the rights attached to their shares, shareholders can usually vote on important decisions, receive dividends when the company declares them, and share in what is left if the company is wound up.
How much control a shareholder has depends on how many shares they hold, the rights those shares carry and what the company's articles of association and any shareholders' agreement say.
What rights do shares usually carry?
| Right | What it means |
|---|---|
| Voting | Voting on resolutions, such as appointing or removing directors or changing the articles |
| Dividends | Receiving a share of profits when a dividend is declared |
| Capital | Receiving a share of any surplus if the company is wound up or sold |
Ordinary shares usually carry all three rights equally per share. Other classes can carry different rights — see how shares work.
Are dividends guaranteed?
No. A company can only pay dividends out of available profits (distributable reserves), and it decides whether to declare them. Shareholders are not entitled to a dividend just because the company made money in a year. Dividends are taxed personally, depending on each shareholder's circumstances — see GOV.UK: tax on dividends.
How do shareholders make decisions?
Shareholders make certain decisions by passing resolutions, either at a general meeting or in writing:
- Ordinary resolution — more than 50% of votes. Used for decisions such as removing a director.
- Special resolution — at least 75% of votes. Used for decisions such as changing the articles or the company name.
So a shareholder with more than 50% can usually pass ordinary resolutions alone, and one with 75% or more can usually pass special resolutions alone. Someone with more than 25% can block a special resolution. These are general rules; your articles and any shareholders' agreement can change how things work in practice.
Do shareholders run the company?
Not day to day. Directors run the company; shareholders own it and appoint or remove the directors. In many small companies the same people do both. See director vs shareholder.
Can shares be sold or transferred?
Yes, usually by completing a stock transfer form and updating the company's register of members. Your articles may restrict transfers, for example requiring existing shareholders to be offered the shares first. Stamp Duty can apply to some share transfers. Changes in shareholders are reported on the next confirmation statement.
Is a shareholder personally liable for company debts?
Generally, a shareholder's liability is limited to the amount unpaid on their shares. If the shares are fully paid, they will not normally have to contribute more. This is the "limited" in limited company.
Is every significant shareholder a PSC?
Anyone holding more than 25% of the shares or voting rights is normally a person with significant control and must be recorded. See who counts as a PSC.
In short
A shareholder owns part of a limited company by holding its shares. Ordinary shares usually give the right to vote on resolutions, receive dividends when declared and share in any surplus if the company is wound up. Dividends can only be paid from available profits and are not guaranteed. Shareholders make certain decisions by resolution: ordinary resolutions need more than 50% of votes, and special resolutions need at least 75%. Shareholders do not run the company day to day — directors do — but they appoint and remove directors. A shareholder's liability is generally limited to any amount unpaid on their shares. Anyone holding more than 25% is usually a person with significant control.
Frequently asked questions
Can I be the only shareholder?
Yes. A private company limited by shares can have a single shareholder, who can also be the sole director.
Are shareholders' names public?
Shareholder information is filed with Companies House on the confirmation statement and appears on the public register.
Sources and official guidance
- GOV.UK: Shareholders
- GOV.UK: Memorandum and articles of association
- GOV.UK: Tax on dividends
- GOV.UK: People with significant control (PSCs)
This guide is general information about UK rules as at 3 October 2026. It is not legal, tax or financial advice.