The “Mutual” VERSUS “Stock”Company?

QUICK DEFINITIONINVESTING BASICS

MUTUAL COMPANY:  A company that has no capital stock or stockholders.  Rather, it is owned by its policy-owners and managed by a board of directors chosen by the policy-owners. 

Any earnings, in addition to those necessary for the operation of the company and contingency reserves, are returned to the policy-owners in the form of policy dividends.

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STOCK COMPANY: A joint-stock company is a business entity in which shares of the company’s stock can be bought and sold by shareholders.

Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.

CITE: https://www.r2library.com/Resource/Title/0826102549

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RELATED TEXTS: https://medicalexecutivepost.com/2021/04/29/why-are-certified-medical-planner-textbooks-so-darn-popular/

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