1.

ROLE OF SHAREHOLDERS AS STAKEHOLDERS

FINANCING : One of the primary reasons for going public is to raise funds from investors. In
return, the company's founders give up part ownership to these new investors. Private companies
and startups may also raise funds through private placements, which are share issues to a select
group of individuals and institutions. The founders of a startup company, including venture capital
backers, may also provide additional capital in exchange for a higher percentage of the
ownership. Unlike bond investors, shareholders do not get periodic interest payments or their
original investment back from the company.

OPERATIONS : One of the primary reasons for going public is to raise funds from investors. In
return, the company's founders give up part ownership to these new investors. Private companies
and startups may also raise funds through private placements, which are share issues to a select
group of individuals and institutions. The founders of a startup company, including venture capital
backers, may also provide additional capital in exchange for a higher percentage of the
ownership. Unlike bond investors, shareholders do not get periodic interest payments or their
original investment back from the company.

GOVERNANCE : Public companies usually have formal corporate governance policies, such
as the composition and roles of different board committees, the role of the chairman, codes of
conduct and business ethics. Boards of directors answer to shareholders, not to management.
Public companies must provide timely and complete disclosures to shareholders. Senior
executives often spend a few days each quarter discussing operations and general business
conditions with shareholders, market analysts and the business media. The chief executive and
the chief financial officer sign off on financial documents, thus making them accountable for errors
and omissions.

CONTROL : Shareholders usually determine who controls a public company. A widely held
company, in which there is not a single majority shareholder, is vulnerable to hostile takeover
attempts. Shareholders can block such moves if they are satisfied with the current management
or if they believe the offering price is insufficient. Institutional shareholders may publicly call on
company management to consider strategic options, such as selling off the company or merging
with another company.

2. DUTIES OF ORGANISATION TOWARDS SHAREHOLDERS

Company should provide a fair return on the investment made by

shareholders. If shareholders do not get proper dividend then they will
hesitate to invest additional funds in the concern.

Shareholders should be kept fully informed about the working of the

company for healthy growth of the business. Shareholders who are the
owners of business should be provided with correct information about
company to enable them to give them true and fair position of the
company to enable them to decide about further investments.