You have absorbed modern market brokenthink.
Companies are for creating goods or services to sell to other parties. They existed long before the idea of shareholders. Following your logic, companies pre-VOC had no existing purpose.
This is not an even comparison. A business that produces the minimum amount (0) of product/service should be compared against a business that produces the minimum amount (-$assets) of profit, which corresponds to 0 revenue. Neither business can be run, but the former can at least sit on its assets or pivot into actually making something.
A business can also produce too much and collapse (see Atari and DeLorean), but it can't collapse from too much profit.
It makes more sense to put the emphasis on profit, I think.
Production is essential to a business and profit is not, strange as that may seem.
This was not intended to be one or at best in the following sense. Making products and making profits are two features of businesses, the first one is essential, the second one is dispensable. No products, no business. No profits, no problem. Even more, no profits is where every business would ideally be, in a functioning market competition should drive the margins towards zero, the price should be equal to the costs of production.
Out of autruism? If not, it's to make money for owners. Shareholders are sort of owners thus to make money for shareholders.
>> For the first companies, the privilege of incorporation, often via royal charter, was granted selectively to facilitate activities that contributed to the population’s welfare, such as the construction of roads, canals, hospitals and schools. Allowing shareholders to profit was seen as a means to that end. Companies were deeply interwoven within the country’s or town’s social fabric, and were meant to contribute to its collective prosperity. <<
https://qz.com/work/1188731/the-idea-that-companies-should-b...
If you don't care, why participate in a conversation about it and ask a sibling reply for a counterpoint?
The argument is that the company exists to benefit society.
Profit exists as a side effect of having investors.
But the outcomes are not the same. Tracing the conversation back, the top level comment pointed out that we should expect companies to give their profits to investors because they operate for profit. A company that exists to benefit society would be expected to put its profits towards bettering society, or at least towards its own ability to do so.
I argue that benefits to society are a side effect of profit-seeking, which capitalism takes advantage of to great effect. A company with no interest in improving the world will nevertheless wind up doing so, because they'll make money in exchange for providing utility, because the system is designed that way. Expecting a company to behave to benefit society instead of for profit will give you bad predictions when the two are at odds.
Sure, but the owners (sole proprietors, shareholders, partners, etc.) of most companies want to make profit selling those services and goods. The more money you make the more you can grow the company or reward yourself (as owner).
1. Company issues stock in order raise capital
2. Company uses capital to grow business
3. Company returns money to stock purchases as risk-reward for purchasing stock
Buy-backs are what a company _should_ do once the capital it raised has had a positive ROI