Really, you can only get to vote on very big decisions (and then I can't remember many votes going against the existing management, except as part of a scheme to get rid of the existing management, or elements thereof).

And you need a majority of votes, which as you note, a single share is unlikely to get you; you don't get the right to manage the company, but, in cooperation with other shareholders, you may be able to do a few, limited, big things. To complain "how is it that someone keeps that money without my consent ?" is a bit strange; you chose to buy into a deal whereby the existing management gets to carry on unimpeded, except if enough shareholders are prepared to do something dramatic.

Just because you alone decide something different should happen doesn't cut it, unless you are really prepared to put your money where your mouth is and buy a majority stake.

Larger companies use their stock chiefly as a form of collateral to borrow against.

For instance, if you work for a software company, developing a new product, then you're getting paid every week or two even though the company hasn't yet sold any copies of the thing that you are developing. Your salary is probably being paid out of borrowed money. But a software company doesn't have any tangible assets to speak of. What it has, is (a) cash-in-bank ... maybe ... and (b) its capitalization, or stock.

A "privately held" company has shares but there is no "ready market" for the shares. Most of the shares are shares held by creditors, who may or may not have voting rights.

If and when a company "goes public," the shares are bought and sold on the open market. But that market is generally controlled by the brokers themselves... who, basically, "sell transactions for a living." It's a very mixed bag... to the point that some very-large public companies over the years have intentionally taken themselves private.

Sorry, that didn't make a whole lot of sense...

Larger companies may sell stock to raise money, banks do not accept it as collateral.

A software company may not have tangible assets like buildings or machinery but they have their software, finished or unfinished. Their employees' salary are being paid out of the operating cash flow, borrowed money or out of money raised through selling shares in the company (eg. venture capital)

Creditors do not hold shares. They are owed money, usually for services rendered or products sold. They do not get to vote.

Public companies do go private, when a person or company buys all issued shares and then delists. One main reason for this is that they are then freed from the obligation to publish financial statements.


Dutch

You can't use venture capital for everything, and banks don't necessarily want to own shares in your company. What they want is a perfected security-interest. People to whom you simply owe money for products or services rendered just want their bills paid on time.

Obviously, a company's financial position changes as it does begin to sell product, and does generate self-sustainable cash flows.

Even a privately-held company must disclose its financial position to the state and federal governments, and to their shareholders, but they do not have to publish them to Wall Street. And there's definitely something to be said for that if you have the necessary cash.

The managers are employed by the company via a contract with the company that is executed with the board of directors, who are the shareholders' representatives. Thus the manager gets some of the money pursuant to the terms and conditions of his contract with the company.

Shareholders elect a board of directors, who (ostensibly) run the company on behalf of the shareholders. How they run the company is by hiring managers.