Saturday, June 9, 2012

As a stakeholder, what are your rights and responsibilities ?

The investors who had invested some money in any company can be called as the stakeholders.
The main purpose of investing money in a company is to earn monetary gains by means of regular dividends and growth in the investment. However, during many situations, the investors are not able to derive the benefits as expected from the companies on account of many reasons.
As a stakeholder in a company, he is having the following rights:
·         To receive the share certificates on allotment or transfer as the case may be in due time. This procedure is applicable to the physical certificates. Nowadays, the investments details are made available to the investors electronically in dematerialization formats. Rarely some investors prefer to receive share certificates in physical form.
·         To receive the copies of the abridged annual reports, the balance sheet, the profit and loss account and the auditor’s report.
·         To participate and vote in the general meetings either personally or through proxies.
·         To receive the dividends as and when approved in the annual general body meetings
·         To get the corporate benefits namely; the rights, bonus etc. once approved;
·         To make an application to the company law board towards directing the company to convene the annual general meetings as and when due;
·         To conduct inspection of the books of accounts of the general meetings and to receive copies thereof;
·         To proceed against the company by way of civil or criminal proceedings;
·         To apply for the winding up of the company and
·         To receive the residual proceeds.
Apart from the rights as mentioned above, the investor also enjoys as an individual shareholder the following rights as a group namely;
To call for an extra ordinary general meeting;
To demand a poll on any resolution;
To apply to the company law board towards investigating into the affairs of the company and apply to the company law board for getting appropriate relief in the case of oppression and/or mismanagement.
In the case of debenture holders, who had invested in the debt instruments, they have the following rights namely;
To receive the interest/redemption in due time;
To receive a copy of the trust deed on request;
To apply for winding up of the company in case the company fails to pay its debt and
To place before the debenture trustee his grievances, if any.
The stakeholder should also keep in mind that the abovementioned rights may not necessarily be absolute. For example, the rights available for the stakeholders for transferring the securities are subject to the company’s right to refuse transfer as per statutory provisions.
Despite the facts, that as stakeholders, apart from the various rights they have as mentioned above, they have certain responsibilities namely;
To remain informed; be vigilant; participate and vote in general meetings and to exercise the rights on their own or as a group keeping in mind their own interest and more specifically the interest on the growth of the company.

No comments: