A stock or share is popularly defined as a capital share under the company’s ownership. Stock corresponds to the claim that the stock owner has on the company’s possession and profit. The more one acquires stock, the greater your share in the company becomes. However the stock holders own capitals that are issued by any business firm. The stock holders do not have their own corporations. The latter are special kind of organizations and they are treated as legal persons by the law.
- Corporations are organizations that can file taxes. They have the permission of borrowing, possessing a property and even file a suit against it. Corporations are often personified as a person to mean that, corporation owns his own possessions and finances. Each and every property of a corporate office belongs to the corporation itself. It is in no way an asset of the shareholders.
- The property of the shareholders and the property owned by a corporation are distinctly different. By the principle of ‘separation of ownership and control’, the power of the share holders is clearly stated. It is to address the shareholders that, they cannot do as they please. Even if a shareholder owns one third of a company’s shares, he is still bound to the rules stated by the organization. Owning one third of a company’s shares does not give any control over any other portion of the property, to the shareholders. Even if the shareholder owns a the part of the share in the company, the company still has its own power and rights over its properties.
- In short, owning a company’s share does not give you an absolute ownership of the latter. Possessing a stock share of your own gives you the voting right in shareholder meetings of the company. It showers you with the privilege of receiving your part of the company’s profit when it is split up. And yes of course it gives you the complete right to sell your share of the company to someone else when you please. Study share market courses online to acquire a compacta idea of how the process goes.
- One plus point is that the more number of shares you own, the more lordship is showered on you and the more sovereignty you will have in conducting the voting procedure. This in turn directly puts you in an indirect control of the administration of the company by appointing the board of directors. This happens apparently when one company owns another. The acquiring corporation buys up the total share of a company, instead of buying their properties separately. Take part in online share market training, to achieve a sound knowledge about share markets and stock exchange. The board of directors are chiefly responsible for enhancing the value of the business firm. Hiring highly qualified professional managers, officials like the chief executive officers, speed up the process.
- Hence the primary significance about being a shareholder is yours possession of the company’s share, which in turn brings you a portion of the company’s profits. This is the basis of the value of the shares.