Going Private To Public With A Company
At the time founders form their business, they invested an original amount of capital in it. This capital is called stock or equity. This stock represents the assets and earnings of a business. It is divided into shares so that a business may be able to sell part-ownership to investors. Investors who buy shares are called shareholders. They buy stocks to become a part-owner of a company. The ownership equity of a shareholder depends on the number of stocks he owns.
The purchase of stocks necessitates the issuance of a stock certificate from a stock book. A stock certificate declares the name of the stockholder, the number of shares he owns and the price of these shares. This certificate is a legal documentation of the purchase; it is used for stock trading.
A shareholder can earn from its stocks by selling them at premium. This means that stocks are sold higher than the purchased value. The price of a stock depends on the business and the economy itself. A stockholder can either earn profits or make a loss with his shares.
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