Stocks And Corporations

by David Jenyns on May 2, 2008

Corporations have a large amount of power in today’s society, but even large corporations occasionally listen to their smaller stockholders — particularly if a number of them band together and start singing the same tune.

To start a corporation in the United States, the owners must obtain a charter from a state government, or possibly from the Federal Government, and must submit to government regulation. All of the business concerns whose stocks or bonds are sold to the public through the stock markets are corporations or the practical equivalent.

Each share is entitled to one vote, so that a stockholder has as many votes as the number of shares he holds. In practice, the voting right of an ordinary stockholder is of little consequence. Corporations are often in need of additional capital for expansion. This causes corporation officers to be more respectful of the “little guy.” Roughly, and over a long period of time, the interests of corporation heads and of small stockholders are likely to agree.

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