Common Shareholder

A shareholder of common stocks issued by a corporation, which entitles him/her to the fractional ownership of the business represented by each share. He/she also can participate in  shareholder meetings and other activities as well as receive dividends.

Common shareholders are on the bottom of the absolute priority ladder, which states that in case of a bankruptcy, common shareholders will only get the remains of what is left after paying off creditors(however,  if the company still owes money after selling off all assets and paying off as much debt as possible, shareholders are not liable for the rest of the debt). In exchange for this risk, common shareholders get to participate in the unlimited upside of the business. The best thing a bondholder can expect is receiving interest paid on time and all of his principal back. But in case of a stock, a common shareholder can really benefit from his fractional ownership if the business does well.

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