At some point in history the company was invented, when was that? Like the idea of a group of people doing commercial operations together needing to be registered with the government. Maybe this goes back to ancient times in that merchants or trade organizations – or guilds or something – needed approval from local monarchs, just to maintain law and order in the land. The East India trading company in one way or another reported to the Queen of England, didn’t it?
So at what point in history did companies need – or want – to register with the modern nation state, and why? How did it come about?
Was it for tax reasons? Or to regulate fraudulent/harmful business activity?
Or was it businesses themselves that wanted it for some kind of benefit or increased privileges?
I assume this was necessary even just to create a concept of “owning” a company, as opposed to just managing or directing the orchestrated effort of a bunch of people, or a company owning property, like the vehicles it used for transportation, and exclusive use over its trademark insignia/symbol, but people not necessarily “owning” a company, perhaps having a position of executive authority at the company but not it being something you could own like property. I am curious why or how this idea of ownership came about, for example, is a company seen almost as intellectual property, like the company is somebody’s idea above all so they have the right to protected control, use, access over it?
Anyway, from that background, when did the idea of selling portions of ownership of a company come about? Did the law need to create a new system where such a thing was legally recognized and possible?
All this is background to my real question: how do companies benefit from people buying stock? It makes sense from the investor perspective. If they think your company will do well, they buy a share and hope it appreciates in value.
The company technically sells shares so does that mean by selling partial ownership “contracts”, even sort of “membership” passes if you will, cash, liquid capital actually flows directly in to their company?
So is that the point of an IPO, the company allows anybody to own some of it and when they sell those shares they actually get richer, and that money is used for their operations, invested back into itself?
Is that the point? Because I don’t understand how companies benefit from this. Or is it a way of trying to demonstrate publicly how much society in general seems to value your company, just as a way of improving your public image, which might attract further investment and participation? For example people take Apple computer more seriously knowing that (for a time) it was one of the most valuable companies in the world. Is the point to attract top talent to work for your company, and other direct investments?
Thank you
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