# Can you buy a company without knowing it



## cosmo (7 Nov 2006)

Imagine this.

You have €1000 in your pocket to buy some shares that will either lose you your €1000 or make you very rich. 

You see a stock that is valued at €0.01 per share. You decide that if there is even a few cent increase you will make a very good return. You buy 100,000 shares for your €1000. 

If you did no research on the company and purchased on the spur of the moment and If the issued number of shares for the company was only 196,000, theoritically you now have 51% of the company. If you were unaware of this what would the consequences be for you? If the company was in debt for millions of Euro, do you now end up assuming this debt?

COULD this happen and if so what would happen to such a foolish investor?

Who would tell you you now own the company?


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## CCOVICH (7 Nov 2006)

Shareholders _generally_ can't lose more than they invest. I don't think you would end up assuming any debts in the situation described above, but that may not be the case in all jurisdictions.


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## dontaskme (7 Nov 2006)

cosmo said:


> Imagine If the company was in debt for millions of Euro, do you now end up assuming this debt?
> 
> COULD this happen and if so what would happen to such a foolish investor?
> 
> Who would tell you you now own the company?


 
the company is a separate legal person and as a limited company, the owner's liabilities are limited to, I think, their paid up capital. The debt owners might have the possibility to take the equity in the company in the event of default in which case the owner would be left with nothing.

I think the company secretary has responsibility for maintaining the shareholders register but I think it would be up to the investor to take control by appointing board members etc. Owning 51% is enough to control the company, doesn't mean you own it.


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## JohnBoy (8 Nov 2006)

in Ireland (if it is an Irish company) you have to declare your shareholding level when you breach the 5% ownership threshold and further declarations are required for every 1% thereafter. You ought to contact the stck exchange and have a frank discussion with someone there.


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## ubiquitous (8 Nov 2006)

cosmo said:


> Imagine this.
> 
> You have €1000 in your pocket to buy some shares that will either lose you your €1000 or make you very rich.
> 
> ...



All stockmarkets in the developed world are highly regulated. Companies must meet certain criteria (including capitalisation thresholds) in order to be listed on regulated stockmarkets. That's why you don't see Paddy's Bar & Lounge or Killinascully Hairdressers on the ISEQ or FTSE. The sort of scenario you describe is therefore impossible.


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