When you own shares in an ASX-listed company, you become a part-owner of that company with a defined set of legal rights. These rights are governed by the Corporations Act 2001 (Cth), the company’s constitution, and ASX Listing Rules. Understanding your rights as a shareholder helps you engage with the companies you own.
Core Shareholder Rights
1. Right to vote Shareholders in public companies have the right to vote on significant corporate decisions. Voting rights are typically proportional to shareholding — one ordinary share equals one vote.
Matters you vote on at an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM):
- Electing or removing directors
- Adopting the remuneration report (executive pay)
- Approving major transactions (large acquisitions, capital raisings)
- Changes to the company’s constitution
- Approving share issuances beyond existing capacity
Most retail investors hold ordinary shares (with full voting rights). Preference shares may have limited or no voting rights.
2. Right to dividends If the company’s board declares a dividend, you are entitled to receive your proportional share. However, dividends are at the discretion of the board — companies are not obligated to pay dividends.
3. Right to information ASX-listed companies must release material information to the market promptly (continuous disclosure obligations). As a shareholder, you have access to:
- Half-year and full-year financial results
- AGM notices and results
- Director announcements and changes
- Any information that could materially affect the share price
All announcements are available free on asx.com.au.
4. Right to attend meetings Shareholders can attend the company’s AGM (typically held within 5 months of financial year end). You can ask questions of the board and vote on resolutions. Most large ASX companies also offer online AGM participation and electronic voting.
5. Right to inspect certain records Shareholders can inspect the company’s register of members (list of shareholders) and certain other documents.
6. Residual right to assets If a company is wound up (liquidated), shareholders (as equity holders) have a residual claim on remaining assets after all debts and creditors have been paid. In practice, in most insolvencies there is little or nothing left for shareholders after creditors are paid.
Pre-emptive Rights and Capital Raisings
When companies issue new shares, existing shareholders in some jurisdictions have pre-emptive rights — the right to buy new shares before they are offered to others, to prevent dilution.
In Australia, ASX-listed companies can issue up to 15% of their issued capital per year without shareholder approval (under ASX Listing Rule 7.1). This means dilutive capital raisings can occur without your vote — but you may be offered participation through a Share Purchase Plan (SPP) at the same price as institutional investors in many cases.
Types of capital raisings to be aware of:
| Type | What it means for shareholders |
|---|---|
| Placement | New shares sold to institutions only — dilutes existing shareholders |
| Rights issue | All shareholders offered new shares at a discounted price (proportional) |
| Share Purchase Plan (SPP) | All shareholders can buy up to a cap at the placement price |
| Dividend Reinvestment Plan (DRP) | Option to receive new shares instead of cash dividend |
How to Vote at an AGM
In person — attend the AGM at the location announced by the company.
By proxy — appoint someone to vote on your behalf (including the company chair). A proxy form is included with the AGM notice.
Online — most large ASX companies use Link Market Services or Computershare to facilitate online voting before the meeting.
Via your broker — some brokers (CommSec, for example) facilitate voting through their platform.
If you do not vote, you are effectively deferring to the majority decision of other shareholders.
Remuneration Report Votes
The Non-Binding Shareholder Vote on the Remuneration Report (executive pay) is a key mechanism for shareholder oversight. Under the Corporations Act, if 25%+ of votes cast oppose the remuneration report twice in consecutive years, a “board spill” resolution must be put to shareholders — potentially resulting in directors being removed.
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Frequently Asked Questions
Do I get to vote on dividends as a shareholder? No. Dividend decisions are made by the board of directors — shareholders do not vote on individual dividend payments. Shareholders do vote on the remuneration report and can elect or remove directors, which provides indirect influence over company capital allocation.
What happens to my shares if a company goes bankrupt? If an ASX company is placed into administration or liquidation, trading in the shares is typically suspended. Shareholders are at the bottom of the priority order — creditors, employees, and senior debt holders are paid first. In most insolvencies, shareholders receive little or nothing. This is a key reason to diversify across multiple companies rather than holding large positions in a single company.
Can I propose a resolution at an AGM? Shareholders holding at least 5% of the votes or 100 shareholders together can request a General Meeting or add a resolution to the AGM agenda (under the Corporations Act). In practice this is rarely done by small retail investors but is a right that exists.
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.