Most people understand that owning stock means owning a small part of a company. However, many new investors have misconceptions about the benefits and responsibilities that come with being a shareholder. A lot of these misunderstandings stem from not fully grasping the limited ownership that each share represents. For big companies like Apple (AAPL) or ExxonMobil (XOM), a single share—or even $1 million worth of shares—is just a tiny fraction of ownership, giving you little say in how the company operates. 

So, what does it actually mean to be a shareholder? Let’s clear up three common misconceptions. 

Key takeaways

• A stockholder owns shares in a company, but the level of ownership doesn’t provide the control or benefits some may expect. 

• Most shareholders don’t have direct control over a company’s operations, though some shares come with voting rights, like voting for board members. 

• Being a shareholder doesn’t entitle you to discounts or the ability to access company assets. 

Misconception #1: “I’m in charge now!” 

Owning stock doesn’t make you the boss. You can’t walk into the company’s headquarters with your stock certificates and start giving orders. When you buy stock, you’re essentially placing trust in the company’s management to make good decisions. If you’re unhappy with the way things are run, your main recourse is to sell your shares. If you’re satisfied, you can hold onto your shares and hope for a return on your investment. 

While you don’t directly manage the company, if you own shares with voting rights, you do get a say in electing the board of directors. The board is responsible for hiring top management, who then run the day-to-day operations. In this way, you have a small say in the company’s direction, even if you don’t have direct control.  

Quick Fact: More than 60% of Americans own stock, according to a 2023 Gallup Poll. 

Misconception #2: I get a discount on goods and services 

A common belief is that being a shareholder entitles you to discounts on the company’s products or services. While some companies, like Berkshire Hathaway (BRK/A), do offer occasional perks or discounts to shareholders, this is rare. Typically, the main benefit of stock ownership is the potential to share in the company’s profits, not to save on purchases. 

Offering widespread discounts to shareholders would likely hurt the company’s revenue, which in turn could lower the stock price. For example, a few people getting a discount at a small business wouldn’t have much impact. However, at a large company with millions of shareholders, even small discounts could mean a significant revenue loss, potentially impacting stock value. So, while a discount might sound appealing, it could actually decrease the value of your investment. 

Misconception # 3: I own a part of the company’s property 

As a shareholder, you own a portion of the company’s equity, but this doesn’t mean you own its property, like desks, equipment, or real estate. Many companies have loans to fund their assets, and those assets are often used as collateral. If the company becomes insolvent, creditors—such as banks or bondholders—have the first claim on the assets. Only after all debts are paid off do shareholders receive anything from the remaining assets.  

The bottom line 

Owning stock doesn’t mean you have control over the company, get special discounts, or have rights to its property. Next time you think about taking your stock certificate into a McDonald’s (MCD) to ask for a discount, remember these common misconceptions about stock ownership. Owning shares allows you to benefit from the company’s success, but it doesn’t come with the powers some might imagine.