Video: Corporate Shareholders

In this lesson, Nick Palazzolo, CPA, unpacks the myriad rights and entitlements of corporate shareholders, from their voting powers in director elections and major corporate decisions to their financial perks like dividends and distributions. He clarifies the nuances between common and preferred stock, including the rights to dividends and distribution priorities in various scenarios, such as bankruptcy. Emphasizing the importance of understanding what dividends mean for a shareholder’s tax situation, Nick breaks down the differences between stock and cash dividends, and their respective influence on a shareholder's tax basis. The lesson then pivots to the realm of shareholder inspection rights, where Nick delineates the proper purposes for book inspection—protecting both the corporations’ and shareholders’ interests—and the fine line between acceptable and unacceptable reasons for accessing the corporation's records. Whether it’s evaluating the company's financial health or probing for potential mismanagement, this lesson demystifies the complexities surrounding shareholders' comprehensive rights and their relevance to corporate governance.