Corporate Stock 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

Corporate Stock is usually divided into two categories, Common Stock and Preferred Stock. Some states also recognize an Undesignated Stock category.

Corporate Stock is sometimes called Equity Security