How To Become a Shareholder with a Company

A shareholder is an individual that owns a stock in a public and private corporation. A Corporation will require additional funds to raise capital for the business and they largely do this by offering their stocks to the general public. Shareholders therefore are owners of the business but that notion will vary depending on how much you have invested in a particular company.

Some may have direct interest in the company while other may seek just short term benefits by purchasing a certain number of stocks.  As a shareholder, you will be able to practice some of the company rights, and will be entitled to stock and cash dividends. Majority of the shareholders are in the secondary market which gives them little power as compared to owners who bought the shares in the primary market.

Instructions

  • 1

    In becoming a shareholder, you need to carefully assess the market situation of that particular company before investing your money. Research extensively, where checking the company’s financial statements and other relevant records over the past three to four years will give you a fair assessment. Either buy shares by directly contacting the company or find a brokerage dealer in your area. Most companies may offer direct stock purchase plan where you can become a shareholder in a matter of minutes. Signing the articles of incorporation can also be a relatively easy route for you.

  • 2

    Sometimes buying from a traditional broker is your route into a particular company. When you are uncertain about where to invest your money, a traditional broker will be able to provide you with all -the necessary details and advise you some of the low-risk options. However, make sure you know the broker before trusting him. There are also discount brokerage houses as well as online broker who more or less provide you the same service. They will be able to buy a certain stock for a less fee but will charge you for this.

  • 3

    You can also buy the shares of a company from existing shareholders. This method is an easy one with little complications but that will depend on your credentials. You need to obtain a share certificate of the previous owner and a proof of your contract. However, read the transferring terms of the company first before opting this route.

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