Organisations and shareholders
An Association of Investment Trust Companies (AITC) case study

Page 0: Introduction

A public limited company (plc) is a company which is allowed to sell its shares to the public and can obtain a listing on the stock exchange. Investors, known as shareholders, can buy these shares, either when the company first issues them or when an existing shareholder offers some for sale.All plcs have a chief executive and a Board of Directors who run the company. Directors are appointed by...
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Page 1: Development of organisations and reasons to become a shareholder

Many businesses have humble beginnings; their founder had a business idea that worked. There are many 'rags to riches' stories of individuals who began with a market stall or corner shop and who are now multi-millionaires. The road to success can be long, requiring relentless hard work and some luck to overcome pitfalls along the way.A business owner may start as a sole trader. They are...
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Page 2: What about investment trusts?

Investing in shares of an individual company involves more risk than in the shares of a variety of companies. This is where collective investment vehicles such as investment trusts, unit trusts and open-ended investment companies (OEICs) come in. These invest in the shares of other companies on behalf of investors. They pool investors' money and have a professional fund manager to invest in a...
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Page 3: Shareholders and their role in an organisation

A shareholder is a part owner of the business to which the shares relate. S/he may be an individual or a large financial institution. Many pension fund managers use clients' money to buy shares as a long-term investment, hoping for a higher return from this investment than might be achieved from other types of assets.Stockbrokers will buy and sell shares according to the wishes of their clients...
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Page 4: Shareholders as stakeholders

A large plc will have a number of different stakeholders of which shareholders are only one, customers perhaps being the most significant. An investment trust company has stakeholders, just like any other PLC, but investment trusts' only customers are its shareholders. This is because investment trusts are companies whose only purpose is to invest in the shares of other companies. They do not...
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Page 5: Conclusion

A stockmarket flotation can help a business to secure funds to help it meet its aims and objectives and to grow. Shareholders can influence decisions made. Ultimately shareholders invest in the stockmarket in the hope of making more money than they would elsewhere. They accept a greater potential risk in the hope of a greater potential return. Shareholders can be either private individuals or...
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