If I own x% of company A, and A buys company B, do I own x% of B?
No, thanks to the principle of corporate personhood.  The legal entity (company C) is the owner and parent of the private company (sub S).  You and C are separate legal entities, as are C and S. This principle helps to legally insulate the parties for purposes such as liability, torts, taxes, and so forth.  If company C is sued, you may be financially at stake (i.e. your investment in C is devalued or made worthless) but you are not personally being sued.  However, the litigant may attach you as an additional litigant if the facts of the suit merit it.  But without legal separateness of corporations, then potentially all owners and maybe a number of the employees would be sued any time somebody sued the business - which is messy for companies and messy for litigants.  It's also far cleaner for lenders to lend to  unified business entities rather than a variety of thousands of ever-shifting shareholders. Note that this is a separate analysis that assumes the companies are not treated as partnerships or disregarded entities (tax nothings) for tax purposes, in which case an owner may for some purposes be imputed to own the assets of C.  I've also ignored the consolidated tax return, which would allow C and S to file a type of corporate joint return that for some purposes treats them similarly to common entity. For the simplest variation of your question, the answer is no.  You do not own the assets of a corporation by virtue of owning a few of its shares. Edit:  In light of your edit to include FB and Whatsapp, and the wrinkle about corporate books.  If sub S is 100% owned by company C, then you do not have any inspection rights to S because you are not a shareholder.  You also do not have virtual corporation inspection rights through company C.  However, if a person has inspection rights to company C, and sub S appears on the books and financial records of C, then your C rights will do the job of seeing S information. However, Facebook is a public company, so they will make regular public filings and disclosures that should at least partly cover Whatsapp.  So I hedge and clear my throat by averring that my securities training is limited, but I believe that the SEC filings of a public company will as a practical matter (maybe a matter of law?) moot the inspection rights.  At the very least, I suspect you'd need a proper purpose (under DGCL, for example), to demand the inspection, and they will have already made extensive disclosures that I believe will be presumptively sufficient.  I defer to more experienced securities experts on that question, but I don't believe inspection rights are designed for public companies. Ok, so imagine I own x% of Facebook and Facebook buys WhatsApp, does   this mean I own x% of WhatsApp? Yea definitely , you own x% of Whatsapp assuming Facebook buys 100% of WhatApps which is in this case  How much shares of FaceBook do I need to own to have access to   WhatsApp's books? As WhatsApp is a privately held company by Facebook , Facebook is not obliged to reveal the books of WhatsApp , though some not all of the books of WhatsApp may appear in Facebook financial report , it really depends on Facebook Accounting policy.
"Yes there are huge number of parts in the chain. Entire careers can be made out of handling clearing and settlement (back office) work for banks, exchanges, and trading houses. Even more so in the old days when this had to be done by hand, but obviously now everything is electronic. I can provide some insight into your questions, at least on the trading side.  Brokers in many cases have their own brokers or their own trading operations. They will have their own order entry and risk control systems, so that is all proprietary, but it usually doesn't involve more than send buy/sell Y shares of name X to venue Z at price P with extra instructions A,B,C,D,E. Eventually an order will make its way to a direct market participant who sends an electronic order directly to an exchange.  Note that when you say market, you should be referring to such ""exchanges"". In the US these are the NYSE, NASDAQ, and so on. When you are talking about futures there is the CME, CBOT, and so on. In Europe there is the EUREX and so on. The ""market"" refers to all these exchanges together which all have their own order mechanisms and matching engines. In many cases exchanges will route orders to other exchanges depending on the specific country's trading rules. Exchanges compete with each other by fee and liquidity offerings, which are shouldered directly by market participants.  Another detail is that each market participant has its own clearing firm, which has prior credit lines established with the market participant and a central clearing house. Like you said as soon as an order is matched, the exchange where the order takes place hands the trade over to the clearing house where the trade is then settled between the clearing firms representing either side of the trade. Clearing disputes happen at this step." Mutual funds buy (and sell) shares in companies in accordance with  the policies set forth in their prospectus, not according to the  individual needs of an investor, that is, when you invest money in (or withdraw money from) a mutual fund,  the manager buys or sells whatever shares that, in the manager's judgement,  will be the most appropriate ones (consistent with the investment policies). Thus, a large-cap mutual fund manager will not buy the latest hot small-cap stock that will likely be hugely profitable; he/she must choose only between various large capitalization companies. Some exchange-traded funds are fixed baskets of stocks. Suppose you will not invest in a company X as a matter of principle. Unless a mutual fund prospectus says that it will not invest in X, you may well end up having an investment in X at some time because the fund manager bought shares in X. With such an ETF,  you know what is in the basket, and if the basket does not include stock in X  now, it will not own stock in X at a later date. Some exchange-traded funds are constructed based on some index and track the index as a matter of policy. Thus, you will not be investing in X unless X becomes part of the index because Standard or Poor or Russell or somebody changed their minds, and the ETF buys X in order to track the index. Finally, some ETFs are exactly like general mutual funds except that you can buy or sell ETF shares at any time at the price at the instant that your order is executed whereas with mutual funds, the price of the mutual fund shares that you have bought or sold is the NAV of the mutual fund shares for that day, which is established based on the closing prices at the end of the trading day of the stocks, bonds etc that the fund owns.  So, you might end up owning stock in X at any time based on what the fund manager thinks about X. With the following variables the periodic (annual) repayment is given by The recurrence equation for the balance b at the end of month x is derived from b[x + 1] = b[x] (1 + r) - d where b[0] = s giving The interest portion of the final payment is b[n - 1] r and the total principal repaid at the end of period n - 1 is s - b[n - 1] Solving simultaneously n = 8.9998 and s = 7240 The principal repaid at the end of the first period is s - b[1] or d - r s = 479.74 "The short answer: zero. dg99's answer gives some good reasons why.  You will basically never be able to achieve diversification with individual stocks that is anywhere close to what you can get with mutual funds.  Owning individual stocks exposes you to much greater risk in that random one-off events that happen to affect one of the companies you own can have a disproportionate effect on your assets.  (For instance, some sort of scandal involving a particular company can cause its stock to tank.) There are only two reasons I can see to invest in individual stocks: a. You have some unique opportunity to acquire stock that other people might not be able to get (or get at that price).  This can be the case if you work for a privately-held company that allows you to buy stock (or options), or allows you to participate in its IPO.  Even then, you should not go too crazy, since having too much stock in the company you work for can double your pain if the company falls on hard times (you may lose your job and your investment). b. For fun.  If you like tracking stocks and trying to beat the market, you may want to test your skills at this by using a small proportion of your investable cash (no more than 10%).  In this case you're not so much hoping to increase your returns as to just enjoy investing more.  This can also have a psychological benefit in that it allows you to ""blow off steam"" and indulge your desire to make decisions, while allowing your passive investments (index funds) to shoulder the load of actually gaining value." How about a third approach: Figure the buyout as above. Figure what percentage of the value of the house the buyout constitutes. When the house sells the other party gets that percentage of the sales price. "Most companies are taken over. One can reasonably guess that company X will be taken over for a price P, at some future point in time. Then the company has a value today, that is less than price P, by a large enough margin so that the investor will likely ""make out"" when the company finally is taken over at some unknown point in time. The exception is a company like Microsoft or Apple that basically grow too large to be taken over. But then they eventually start paying dividends when they become ""mature."" Again, the trick, during the non-dividend paying period (e.g. ten or fifteen years ago) is to guess what dividends will be paid in some future time, and price the stock low enough today so that it will be worthwhile for the buyer." NEVER and I do mean **NEVER** split a business ownership 50/50.  --  Make it 51/49 or whatever you want but never go 50/50 as if there is ever a disagreement You have the power to over rule. If you go 50/50 you will potentially get stuck in a legal battle which you do not want. ...ok, you understand that the board of directors don't collect all of the profit from a company, and that shareholders can sell stock, right?   It his honestly confusing to me that you have a problem with shareholders being given ownership in a company that is spun off from the company that they own.