How to Become a Shareholder of a Corporation

Becoming a shareholder poses the risk of losses.

Warren Buffet, one of the most successful investors in the world, is a shareholder in dozens of leading companies through his holding company, Berkshire Hathaway; as of publication, his shares are valued at nearly $50 billion. To become a shareholder, you don't need to be a billionaire; you only need to buy a single stock in a company. There are different options for purchasing stock; you can can become a shareholder through a company's direct investment plan, through a discount brokerage or through a traditional broker.

Instructions

1. Purchase stock directly from the issuing company if it offers a direct stock purchase plan, or DRIP. Not all corporations offer a DRIP, but if it does, you can become a shareholder directly without using a broker.

2. Purchase stock through one of the many discount brokerage. They let you purchase stocks for a low fee but include advisory services only for additional charges. They are a good option if you know what company stock you want to purchase and don't need advice.

3. Purchase stocks through a traditional broker if you know that you want to become a shareholder in a company but you aren't certain which company is the right choice for you. A stockbroker can advise you based on your financial goals and requirements. Verify that your broker is a member of the Financial Industry Regulatory Authority through the BrokerCheck page of the FINRA website.

References

• "The Neatest Little Guide to Stock Market Investing"; Jason Kelly; 2009
• CNBC: Warren Buffett Watch
• "The Snowball: Warren Buffett and the Business of Life"; Alice Schroeder; 2008

Resources

• FINRA: BrokerCheck