[Commerce Class Notes] on How to Become a Shareholder? Pdf for Exam

A shareholder, also known as the stockholder, is a person, a company, or an institution who or owns at least one share of a company’s stock, known as equity. Shareholders are required as the owners in a company, as they reap the benefits of a business’ success. The rewards of the company come in the form of increased stock valuations, or as the financial profits that are being distributed as dividends. In contrast to this, when a company loses money, the share price invariably drops, this can lead the shareholders to lose money, or they might suffer declines in their portfolios’ values as well. 

How do You become a Shareholder in a Company?

A corporation issues stock to represent an ownership interest in the company, for making the owner a shareholder. This news often depicts fluctuations of the stock market, it shows the daily results of the stock market.  This is a collection of stocks that are based on size or industry as a measure of how the overall investment world performed. 

Becoming a shareholder with any public company means buying the stock of the company with the help of a brokerage firm. On the other hand, becoming a shareholder in a private corporation involves directly contacting the company with an offer to invest.

To invest in companies and be a shareholder of the same we will share some important points which will give us an idea about ‘how to become a shareholder of a company’. 

1. Buying Stocks from Brokerage Firms

The brokerage firms buy and sell stocks along with other financial instruments. These firms have different levels of service depending on the type of information and service one needs from them.

2. Full-Service Brokers

It all depends upon the need of the service required. For instance, if an individual wants to invest in a company, he needs to hire a full-service broker to analyze the companies and give market analysis, and no other details as well. But, if the share is being purchased for any future time, like for example for one’s grandchildren, then one can ask for discounted information from the full-service broker to provide only the required information without digging into the details. 

 

3. Types of Stocks

Not all stocks are created equally. There are types of stocks that the investor needs to be aware of. After total knowledge of the stock, he can invest in the company with his adequate type of stocks. 

4. Making the Purchase

After a good analysis, one can buy the stock. This requires a “buy” order. This is done through the broker or the online brokerage platform. Generally, the new accounts require a minimum balance to ensure that one can pay the price of the stock before its purchase. 

After calculating their own budget, one can buy the stock. Here the investor is required to know the market price of the stock and the currently fluctuating rate.

Investing in Private Companies

In order to buy shares from private companies, there is a different process altogether. Most small businesses are these private corporations that are owned by a small group of owners and investors. Private corporations manage their stocks in a ledger that is being maintained by the Corporate Secretary.

An interested party needs to call the secretary or the president, stating his desire to buy into the company. Next, he needs to negotiate the price per share and the number of shares. The owners are reluctant to give up a majority shareholder control so that their ownership is not at stake.

Once the number of shares and their value is established, the pay is remitted to the company. Notes are then made in the ledger of the new ownership, and a paper stock certificate is signed by the president and the corporate secretary, which is being issued to the new shareholder as proof of ownership.

Is this page helpful?

Cheatsheet for the Students to score High Marks in the Exam with Ease

1. Read. Revise. Repeat.

If a student wishes to excel in any subject, then he/she should read the NCERTs like their favorite comic books. That’s right. Read!!! Reading NCERTs is the basic requirement for the students. After that, reference books like S Chand, Poonam Gandhi, and VK Ohri can be referred to to understand the difficult topics of commerce. Lastly, Revision is the best way to ensure that the learning is fed to the subconscious mind. In this regard, students can get free access to the incredible Revision notes and keynotes provided by the exquisite team of teachers at and important questions along with the answers for the students to get the last minute preparation, at its best.

2. Solve Question papers and track your progress

To master the art of learning more in less time students are required to solve the previous year’s question papers solved by the experienced teachers at . Students can also refer to the Sample question papers available at the website of for free.

3. Practice writing again and again

Students who wish to excel in exams are required to excel in writing. That’s right. It is ultimately how well you are able to present your ideas by writing. So write your notes every day, again and again. 

4. Go and start your free 7 day trial of

The best way to dive into online quality learning is to apply for the free trial of at the website of . In this way, students can get access to the ocean of unlimited learning in no time. So why wait? Go and apply for the 7-day free trial now!

5. Learn from the pocket-friendly courses at

How would it feel to have the best of all academic courses on your fingertips at an easy-going price of just 1 rupee per course? That’s right! provides the most amazing Micro courses for all the necessary topics of every class and subject for all the students of CBSE, ICSE, and State board.