is used by Corporations as a way to raise capital.
Anyone who buys Corporate Stock
becomes a partial owner of the Corporation which issued the Corporate Stock
Each share of Corporate Stock
owned by an investor represents a proportionate share of interest in that Corporation.
Anyone who owns Corporate Stock
is called a Shareholder of the Corporation.
A Corporation normally retains at least 51% of its Corporate Stock
The remaining shares of Corporate Stock
are sold directly by the Corporation to purchasers or on the open market through stock brokers.
Some shares of Corporate Stock
are given directly to employees of the Corporation.
If one Shareholder owns more than 50% of all available Corporate Stock
then that Shareholder will be able to determine the way in which the Corporation conducts business.
This is the reason why Corporations try to own (or control) more than half of their Corporate Stock
A Shareholder who owns more than 50% of the Corporate Stock
is called the Controlling or Majority Shareholder.
Corporations used to issue paper Stock Certificates
to anyone that purchased their Corporate Stock
but now days most Corporate Stock
purchase information is stored in computerized databases.
In return for purchasing Corporate Stock
in the Corporation, the purchaser may be entitled to voting rights or dividends of the Corporation's profits depending on the type of Corporate Stock
EXAMPLE OF A CORPORATE STOCK CERTIFICATE
is usually divided into two categories, Common Stock
and Preferred Stock
Some states also recognize an Undesignated Stock
is sometimes called Equity Security