Stocks in a corporation, known as securities, are federally regulated by the Securities and Exchange Commission (SEC), ensuring investor protection and market integrity.
Stocks in a corporation are known as "securities" and are federally regulated by the Securities and Exchange Commission (SEC). The SEC was established to protect the interests of public investors against malpractices in the investment industry, enforcing regulations on corporations and brokerage firms dealing in securities.
Corporations issue stock, which represents ownership of the company, and shareholders have limited liability for the company's debts but share in its profits. Stock can be publicly traded, allowing companies to raise capital by selling shares to investors.
Shareholders receive dividends when the company distributes profits, and the stock exchange is a marketplace where stocks are bought and sold, enabling buyers to own a portion of a company.
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