What are your Shareholder Rights?

A Quick Guide for Everyday Retail Investors in the UK

13 Jun 2024

As a retail investor in the UK, owning shares provides you with various rights and responsibilities. Understanding your rights as a shareholder is crucial for making informed decisions, ensuring your portfolio is aligned with your values, while protecting sustainable financial returns.

At Root we have prepared a quick guide to the key shareholder rights of investors in the UK and how our solutions can support you exercise these rights.

  1. Right to Attend General Meetings

As a shareholder, you have the right to attend general meetings of the company you have invested in, including Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). These meetings are essential as a regular touch point for investors of any size to discuss significant company matters with the executive team.

Traditionally, everyday retail investors have been reliant on their trading platform or broker to keep them updated on these meetings. In some cases, your broker will not give you information on these meetings without you requesting it, leaving individuals to do their own research. While trading platforms and brokers are doing more to support proxy voting, they often falter on providing up to date, easily accessible data to their users on when and where AGMs are happening.

  1. Right to Vote at General Meetings

In addition to attending general meetings, shareholders have the right to vote on various matters, such as electing directors, approving financial statements, and making decisions on mergers or acquisitions. Often these votes are cast by proxy, as a lot of shareholders are unable to attend meetings in person to vote.

Each year companies are required to file meticulously planned and technically worded documents called proxy statements giving context to the issues that are to be voted on. While some trading platforms have made proxy voting much more accessible, in most cases everyday investors are unable to access any simplified context to the issues being voted.

Check out our guide on how to proxy vote on different trading platforms in the UK!

  1. Right to Receive Information

Shareholders have the right to receive timely and accurate information about the company. This includes annual reports, financial statements, and other important communications.

Often your broker will enable you to access these documents pretty easily, though non-professional retail investors will have to go through publicly available information on the company themselves. Institutional investors, on the other hand, have the resources available to buy summaries and advice on how to approach the information companies publish.

  1. Right to Propose Shareholder Resolutions

As a shareholder, you can propose resolutions to be discussed and voted on at general meetings. This can include matters such as changes to corporate policy or the appointment of directors. In the UK, a group of 100 shareholders, or those holding at least 5% of the total voting rights can put forward a resolution together to be voted on at a general meeting.

Due to the way ownership of shares via a trading platform is often structured, it can be hard to utilise these rights, as you may not have access to a share certificate to prove your ownership.

Other Important Shareholder Rights

In addition to the primary rights listed above, shareholders in the UK have several other rights they should be aware of that can be exercised under specific circumstances. These include the right to receive dividends when declared, the right to transfer shares to another party, and the right to sue for wrongdoing if the company’s management acts against shareholders' interests.

How the Root Engage platform can help you

  • Get notifications on meetings in US and UK companies

  • Find out when and where meetings are happening

  • Compiled, simplified information on the issues being discussed at companies

  • Centralised shareholder information relevant to all your investment portfolios

  • Coming soon - direct connection to listed companies

Sign up to the waitlist below!

Supporting Legislation

Understanding the legislative framework that underpins these rights is important in ensure they remain protected. The primary legislation which you can explore further includes:

  • The Companies Act 2006: This is the principal legislation that governs the rights and responsibilities of shareholders in the UK. It outlines the rights to attend and vote at general meetings, receive information, transfer shares, and propose resolutions.

  • The Financial Services and Markets Act 2000: This act provides the framework for the regulation of financial markets and the protection of investors, including provisions for the transfer of shares.

  • Future Policy Enhancements: Future policy is expected to enhance shareholder access to rights with the Digitisation Taskforce in the UK and the Shareholder Rights Directive II in the EU.

Conclusion

Owning shares as a retail investor of any size in the UK comes with a suite of rights designed to protect your investment and ensure your voice is heard in corporate governance. By understanding and exercising these rights, you can play an active role in the companies you invest in and contribute to their success. It’s important to note that these rights are specific to UK shareholders. We will provide more information on shareholder rights in other countries in future articles.

Always stay informed and proactive in managing your investments, and can use Root's resources to stay connected with the companies in which you hold shares. Your rights as a shareholder are a powerful tool in navigating the financial markets and achieving your investment goals.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

As a retail investor in the UK, owning shares provides you with various rights and responsibilities. Understanding your rights as a shareholder is crucial for making informed decisions, ensuring your portfolio is aligned with your values, while protecting sustainable financial returns.

At Root we have prepared a quick guide to the key shareholder rights of investors in the UK and how our solutions can support you exercise these rights.

  1. Right to Attend General Meetings

As a shareholder, you have the right to attend general meetings of the company you have invested in, including Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). These meetings are essential as a regular touch point for investors of any size to discuss significant company matters with the executive team.

Traditionally, everyday retail investors have been reliant on their trading platform or broker to keep them updated on these meetings. In some cases, your broker will not give you information on these meetings without you requesting it, leaving individuals to do their own research. While trading platforms and brokers are doing more to support proxy voting, they often falter on providing up to date, easily accessible data to their users on when and where AGMs are happening.

  1. Right to Vote at General Meetings

In addition to attending general meetings, shareholders have the right to vote on various matters, such as electing directors, approving financial statements, and making decisions on mergers or acquisitions. Often these votes are cast by proxy, as a lot of shareholders are unable to attend meetings in person to vote.

Each year companies are required to file meticulously planned and technically worded documents called proxy statements giving context to the issues that are to be voted on. While some trading platforms have made proxy voting much more accessible, in most cases everyday investors are unable to access any simplified context to the issues being voted.

Check out our guide on how to proxy vote on different trading platforms in the UK!

  1. Right to Receive Information

Shareholders have the right to receive timely and accurate information about the company. This includes annual reports, financial statements, and other important communications.

Often your broker will enable you to access these documents pretty easily, though non-professional retail investors will have to go through publicly available information on the company themselves. Institutional investors, on the other hand, have the resources available to buy summaries and advice on how to approach the information companies publish.

  1. Right to Propose Shareholder Resolutions

As a shareholder, you can propose resolutions to be discussed and voted on at general meetings. This can include matters such as changes to corporate policy or the appointment of directors. In the UK, a group of 100 shareholders, or those holding at least 5% of the total voting rights can put forward a resolution together to be voted on at a general meeting.

Due to the way ownership of shares via a trading platform is often structured, it can be hard to utilise these rights, as you may not have access to a share certificate to prove your ownership.

Other Important Shareholder Rights

In addition to the primary rights listed above, shareholders in the UK have several other rights they should be aware of that can be exercised under specific circumstances. These include the right to receive dividends when declared, the right to transfer shares to another party, and the right to sue for wrongdoing if the company’s management acts against shareholders' interests.

How the Root Engage platform can help you

  • Get notifications on meetings in US and UK companies

  • Find out when and where meetings are happening

  • Compiled, simplified information on the issues being discussed at companies

  • Centralised shareholder information relevant to all your investment portfolios

  • Coming soon - direct connection to listed companies

Sign up to the waitlist below!

Supporting Legislation

Understanding the legislative framework that underpins these rights is important in ensure they remain protected. The primary legislation which you can explore further includes:

  • The Companies Act 2006: This is the principal legislation that governs the rights and responsibilities of shareholders in the UK. It outlines the rights to attend and vote at general meetings, receive information, transfer shares, and propose resolutions.

  • The Financial Services and Markets Act 2000: This act provides the framework for the regulation of financial markets and the protection of investors, including provisions for the transfer of shares.

  • Future Policy Enhancements: Future policy is expected to enhance shareholder access to rights with the Digitisation Taskforce in the UK and the Shareholder Rights Directive II in the EU.

Conclusion

Owning shares as a retail investor of any size in the UK comes with a suite of rights designed to protect your investment and ensure your voice is heard in corporate governance. By understanding and exercising these rights, you can play an active role in the companies you invest in and contribute to their success. It’s important to note that these rights are specific to UK shareholders. We will provide more information on shareholder rights in other countries in future articles.

Always stay informed and proactive in managing your investments, and can use Root's resources to stay connected with the companies in which you hold shares. Your rights as a shareholder are a powerful tool in navigating the financial markets and achieving your investment goals.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

As a retail investor in the UK, owning shares provides you with various rights and responsibilities. Understanding your rights as a shareholder is crucial for making informed decisions, ensuring your portfolio is aligned with your values, while protecting sustainable financial returns.

At Root we have prepared a quick guide to the key shareholder rights of investors in the UK and how our solutions can support you exercise these rights.

  1. Right to Attend General Meetings

As a shareholder, you have the right to attend general meetings of the company you have invested in, including Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). These meetings are essential as a regular touch point for investors of any size to discuss significant company matters with the executive team.

Traditionally, everyday retail investors have been reliant on their trading platform or broker to keep them updated on these meetings. In some cases, your broker will not give you information on these meetings without you requesting it, leaving individuals to do their own research. While trading platforms and brokers are doing more to support proxy voting, they often falter on providing up to date, easily accessible data to their users on when and where AGMs are happening.

  1. Right to Vote at General Meetings

In addition to attending general meetings, shareholders have the right to vote on various matters, such as electing directors, approving financial statements, and making decisions on mergers or acquisitions. Often these votes are cast by proxy, as a lot of shareholders are unable to attend meetings in person to vote.

Each year companies are required to file meticulously planned and technically worded documents called proxy statements giving context to the issues that are to be voted on. While some trading platforms have made proxy voting much more accessible, in most cases everyday investors are unable to access any simplified context to the issues being voted.

Check out our guide on how to proxy vote on different trading platforms in the UK!

  1. Right to Receive Information

Shareholders have the right to receive timely and accurate information about the company. This includes annual reports, financial statements, and other important communications.

Often your broker will enable you to access these documents pretty easily, though non-professional retail investors will have to go through publicly available information on the company themselves. Institutional investors, on the other hand, have the resources available to buy summaries and advice on how to approach the information companies publish.

  1. Right to Propose Shareholder Resolutions

As a shareholder, you can propose resolutions to be discussed and voted on at general meetings. This can include matters such as changes to corporate policy or the appointment of directors. In the UK, a group of 100 shareholders, or those holding at least 5% of the total voting rights can put forward a resolution together to be voted on at a general meeting.

Due to the way ownership of shares via a trading platform is often structured, it can be hard to utilise these rights, as you may not have access to a share certificate to prove your ownership.

Other Important Shareholder Rights

In addition to the primary rights listed above, shareholders in the UK have several other rights they should be aware of that can be exercised under specific circumstances. These include the right to receive dividends when declared, the right to transfer shares to another party, and the right to sue for wrongdoing if the company’s management acts against shareholders' interests.

How the Root Engage platform can help you

  • Get notifications on meetings in US and UK companies

  • Find out when and where meetings are happening

  • Compiled, simplified information on the issues being discussed at companies

  • Centralised shareholder information relevant to all your investment portfolios

  • Coming soon - direct connection to listed companies

Sign up to the waitlist below!

Supporting Legislation

Understanding the legislative framework that underpins these rights is important in ensure they remain protected. The primary legislation which you can explore further includes:

  • The Companies Act 2006: This is the principal legislation that governs the rights and responsibilities of shareholders in the UK. It outlines the rights to attend and vote at general meetings, receive information, transfer shares, and propose resolutions.

  • The Financial Services and Markets Act 2000: This act provides the framework for the regulation of financial markets and the protection of investors, including provisions for the transfer of shares.

  • Future Policy Enhancements: Future policy is expected to enhance shareholder access to rights with the Digitisation Taskforce in the UK and the Shareholder Rights Directive II in the EU.

Conclusion

Owning shares as a retail investor of any size in the UK comes with a suite of rights designed to protect your investment and ensure your voice is heard in corporate governance. By understanding and exercising these rights, you can play an active role in the companies you invest in and contribute to their success. It’s important to note that these rights are specific to UK shareholders. We will provide more information on shareholder rights in other countries in future articles.

Always stay informed and proactive in managing your investments, and can use Root's resources to stay connected with the companies in which you hold shares. Your rights as a shareholder are a powerful tool in navigating the financial markets and achieving your investment goals.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

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© 2024 – All Rights Reserved - Root

© 2024 – All Rights Reserved - Root

© 2024 – All Rights Reserved - Root