Owning Company Shares

The concept of owning shares of a company can be a very abstract concept. Unlike owning a home that you live in, or a car that you drive daily, owning shares in a company does not entitle a person to claim ownership in the traditional sense, as with the home or car. Owning shares (stock) in a company entitles a person to a share of the ownership of the company, and therefore a claim on the company’s earnings.

Why Do Companies Go Public?

As a new business develops and grows, changes in the structure and direction of the business must be periodically made to match company’s goals. Even the company’s goals should be re-evaluated from time-to-time to prevent stagnation, and potentially missing opportunities. Many successful businesses start off as a simple part-time sole-proprietorship or partnership in someone’s garage, and eventually end up as an industry-leading multinational titan (i.e. Microsoft), or somewhere in between. What’s important is that as a business grows

Types of Stock

When the owners, or founders of a business decide to organize it as a corporate entity, ownership of the company is then realized via the possession of the corporation’s stock. A stock certificate, often referred to as a “share”, represents a share of the ownership of a corporation. Each share also grants its owner voting rights on matters concerning the corporation, and for those stock holders that own the majority of the shares, it allows them to have