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It's not clear that investors own a corporation, in the same sense that you own something like a phone or a house. The right of investors to make a claim on the

It's not clear that investors own a corporation, in the same sense that you own something like a phone or a house. The right of investors to make a claim on the resources of a corporation, or to direct its actions, are quite limited unless the investor is on the board of directors. The corporation has duties to its shareholders--it can't defraud them, for instance--but those duties are actually quite limited. In most cases the remedy for unhappy shareholders is just to sell their stock. The CEO doesn't own the corporation either, but the CEO can direct the resources of the corporation. In any sort of operational sense, the CEO only reports to the board of directors, not to the shareholders entire.

spork12 8y ago
Some companies offer different classes of stock with voting or non-voting rights. For example Google has Class A - (GOOGL) and Class C - (GOOG)
deelowe 8y ago
Investors always own corporations (via their voting power). That's what a corporation is. Some companies have different classes of investors (e.g. restricted stock that isn't traded and converts when sold) to protect against things like hostile take overs, but it doesn't change the overall structure.
- vonmoltke 8y ago
  "Ownership" as a legal concept is not that simple: https://www.google.com/amp/s/amp.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.google.com/amp/s/amp.ft.com/content/7bd1b20a-879... The meat of the article: If I own an object I can use it, or not use it, sell it, rent it, give it to others, throw it away and appeal to the police if a thief misappropriates it. And I must accept responsibility for its misuse and admit the right of my creditors to take a lien on it. But shares give their holders no right of possession and no right of use. If shareholders go to the company premises, they will more likely than not be turned away. They have no more right than other customers to the services of the business they “own”. The company’s actions are not their responsibility, and corporate assets cannot be used to satisfy their debts. Shareholders do not have the right to manage the company in which they hold an interest, and even their right to appoint the people who do is largely theoretical. They are entitled only to such part of the income as the directors declare as dividends, and have no right to the proceeds of the sale of corporate assets — except in the event of the liquidation of the entire company, in which case they will get what is left; not much, as a rule.

spork12 8y ago

Some companies offer different classes of stock with voting or non-voting rights. For example Google has Class A - (GOOGL) and Class C - (GOOG)

deelowe 8y ago

Investors always own corporations (via their voting power). That's what a corporation is. Some companies have different classes of investors (e.g. restricted stock that isn't traded and converts when sold) to protect against things like hostile take overs, but it doesn't change the overall structure.

vonmoltke 8y ago
"Ownership" as a legal concept is not that simple: https://www.google.com/amp/s/amp.ft.com/content/7bd1b20a-879b-11e5-90de-f44762bf9896 https://www.google.com/amp/s/amp.ft.com/content/7bd1b20a-879... The meat of the article: If I own an object I can use it, or not use it, sell it, rent it, give it to others, throw it away and appeal to the police if a thief misappropriates it. And I must accept responsibility for its misuse and admit the right of my creditors to take a lien on it. But shares give their holders no right of possession and no right of use. If shareholders go to the company premises, they will more likely than not be turned away. They have no more right than other customers to the services of the business they “own”. The company’s actions are not their responsibility, and corporate assets cannot be used to satisfy their debts. Shareholders do not have the right to manage the company in which they hold an interest, and even their right to appoint the people who do is largely theoretical. They are entitled only to such part of the income as the directors declare as dividends, and have no right to the proceeds of the sale of corporate assets — except in the event of the liquidation of the entire company, in which case they will get what is left; not much, as a rule.