Just the other day I was asked the following question ‘Why would a company want to give up its shares to someone else? It would lose control over itself.’ At first I was stunned. Never had I been asked such a question and never had I thought about this way. But to put that aside, if already one asked, there may be others out there with the same question. So I thought, I’ll give it a try and clarify the terms ‘share’ and ‘shareholders’ a bit.

To begin with the answer I’d like to state that ‘a company’ is not a physical person with its wills and wishes. A company is a legal body, which operates solely based on the actions performed by people. People are the ones who also ‘own’ the company.

The term ‘own’ comes into the equation in the form of the ‘share’. You as a person can own a share of the company. Those shares can add up as a 100% meaning you are the sole owner or anything below 100% of total ‘shares’. The people owning those shares are called ‘shareholders’. They are essentially the people whose dreams and decisions a company bases its actions on. If a company owned all his shares, there would be no-one to report to. A company does not think on itself nor is it responsible for its actions. In the case that all the shares would be owned by the company itself, legally a prohibited situation, the company would be visionless. Okay, perhaps not visionless, because we’d still have the management, but as not the owners, they would have to report to the real owners, who would be the company? It’s nonsense.

It’s the shareholders who control the company and not the company itself. The control is acted out in various ways – means of reporting, meetings, but also appointment of Management Board members, or if applicable, Supervisory Board members, who then appoint Management Board members. The shareholders name the persons they leave in charge of management and governance. They are the people who make sure that the owner’s dreams and decisions are formed into reality.

So ‘No, a company does not control itself nor has it the capability to do so.’ A company is a mere legal body, who acts upon shareholders wishes and will.