Limited Liability

• This is a very important legal concept. It limits an investor's liability for corporate actions to the amount invested, i.e., plaintiffs cannot come after investors for more money than they can collect from a corporation, if it is found liable.
  
  

Voting Rights

• Investors have the right to elect the board of directors and vote on the important affairs of the corporation at annual meetings of shareholders. They may vote in person or by proxy --- by appointing another person to vote on their behalfs.
  
  

Distributions

• Shareholders are entitled to a share of company distributions proportionate to their stock ownership: cash and stock dividends, subsidiary spin-offs and property distributions.
  
  

Preemptive Rights

• Some corporate charters provide that if a corporation intends to raise additional capital by selling stock, it must first offer it to the existing shareholders at a subscription price in an amount sufficient for the shareholders to maintain their percentage stakes. If a shareholder declines the offer, the corporation can then offer it to new investors in a secondary offering.
  
  

Inspection of Corporate Books

• Shareholders have the right to inspect corporate books by obtaining a list of current shareholders and receiving an annual report, but they do not have the right to inspect the minutes of directors' meetings or detailed accounting books.
  
  

Legal Action

• Shareholders have the right to take legal action against the management or the board for illegal acts or violations of the corporate charter.
  
  

Residual Claims

• In dissolution or bankruptcy, shareholders have a residual claim to corporate assets, meaning that after other corporate obligations such as payroll, taxes and creditors have been paid, shareholders may attempt to recover their investment.