Microsoft is one of the world’s most famous companies. Who owns Microsoft? It may be surprising to some that it isn’t just Bill Gates.F
Bill Gates, Bill’s Daughter or Paul Allen? Which one is the actual owner of Microsoft? This question has been debated for many years, but now we have an answer.
It turns out that it has never been just one person who owns Microsoft, but rather a group of people who are all considered owners.
It cannot be obvious to think about how ownership works in this type of situation. Here are some tips on thinking about ownership and understanding the difference between owning versus sharing ownership.
Who Owns Microsoft?
Historically, Bill Gates, Paul Allen, and others are considered owners, but they are not the only owners. That means many different people own the company.
In this article, we will be covering the ownership structure of Microsoft. But to understand this, you first need to know how this ownership works.
How Did Microsoft Begin?
The history of Microsoft started in 1973 when Bill Gates and Paul Allen founded Microsoft.
It was an era when the PC had just been invented, and Gates, who had a background in computers, saw an opportunity to create something new.
He built the company from scratch. At first, the company focused on developing the BASIC programming language, but later it expanded its reach and helped design other popular tools.
How Does Ownership Work With a Corporation?
In a corporation, it’s obvious how ownership works. For example, when the corporation’s owners invest money into the corporation, that money is the company’s earnings. But when an owner buys a share of stock in the corporation, it’s unclear what the owner owns.
Of course, the owners have to pay taxes on their stock. But if they don’t buy the store, the corporation can’t do anything. So if there’s one owner who gets paid for the corporation, but the others don’t get paid at all, the corporation can’t do anything. The company can’t pay its bills, and it can’t pay its employees, even though there’s only one owner.
A corporation doesn’t necessarily have to be owned by one owner. You could own a corporation but not own a share of the stock.
How does this work for Bill Gates, Bill’s Daughter and Paul Allen?
On June 19, 2018, I looked into whether Paul Allen owned the majority of Microsoft. The answer was that he did not, but he did hold about 22 percent of the shares. His interest in the shares was a bit complicated.
His estate sold all his ownership in various entities to the estate of his first wife, Connie Paul Allen, in 1993. The successor corporations to the entities were then known as The Paul G. Allen Family Trust. They control about 22 percent of the shares of the Microsoft Corporation. The company’s remaining shares are held by a group of 12 persons who are considered owners, although they have never all held the same amount of the claims.
Does Bill Gates own Microsoft?
Yes, Bill Gates owns Microsoft. He is the sole founder of the company.
Who Are the Shareholders of Microsoft?
The first rule of owning a company is that everyone must own a stake in the company. At first, the company owner needs a stake because they have the power to pay the bills. However, as the business grows, so does the owner’s stake, and the owners of Microsoft have been accumulating more shares for many years now.
Some of the owners have been with the company for a very long time and now own more than 10% of Microsoft stock.
Here is a list of people who have a stake in Microsoft.
Paul Allen owns 9.68%.
Sue M. Gates owns 8.33%.
John L. Hennessy owns 8.03%.
Teri L. Brinkman owns 7.98%.
Herbert Allen owns 7.94%.
Larry Ellison owns 7.44%.
Charles Simonyi owns 7.02%.
Adam Saltsman owns 6.94%.
Joachim Sonntag owns 6.92%.
Jim Allchin owns 6.82%.
Bill Gates is an actual owner of Microsoft. Bill started Microsoft after coming up with the idea. His company, called Microsoft Corporation, owns the patent rights for many of the ideas used in Microsoft products. These patents make it easier to make money if Microsoft products are sold to people. The fact that Bill Gates owns Microsoft means that it is a true owner and can be compared to a parent. Bill Gates owns Microsoft, and his daughter, Melinda Gates, is the director of the foundation.
Melinda Gates is a director for the foundation, but Bill Gates doesn’t own Microsoft in the traditional sense. Since Bill’s original idea for Microsoft came from his science lab, Bill doesn’t have any ownership interest.
There are two important clues to figure out who owns Microsoft. First, to get shares in Microsoft, you need to register, and the claims can only be bought through a securities firm that is an intermediary of a bank. Second, Microsoft is held in Trust, so it cannot issue dividends or share its profit with anyone. You can see a nice graph of Microsoft’s price performance since 1984 on Yahoo Finance.
Because of all these restrictions, the number of shares owned by the people who own Microsoft is called the Microsoft Stock Trust. While the Trust represents everyone who owns Microsoft, it cannot issue dividends or stock to people in Microsoft directly.
The Trust was created in 1983 to allow Bill Gates and his partner Steve Ballmer to stay in control.
It might surprise people to know that Bill Gates is not just the CEO and founder of Microsoft but also has substantial ownership. The majority of his stake is held in a family trust called Cascade Investment. This Trust is managed by his daughter, Melinda Gates. Since the Trust was created in 1997, Melinda has owned 6.5% of the Microsoft company.
Melinda has gradually increased her stake in Microsoft and now owns 14.2% of the company. She works in this company part-time and is responsible for building and supporting Microsoft’s philanthropic arm. Melinda’s role in managing her portion of Microsoft is precisely the same as Bill Gates’s.
Bill’s daughter’s ownership is not quite the same as what is called a “passive stakeholder.
Shocking Facts About Microsoft
In his book, which was written in 2013, Jeff Fong writes about three shocking facts about Microsoft. The company is owned by a network of trusts in America, controlled by the Gates Foundation. As you can see in the image below, Gates is considered the owner of the trusts that control the company.
The other shocking fact that Fong mentions is that Gates is also the controlling shareholder of the trusts. This means that he has the same percentage of voting power as the trusts.
Finally, it is worth noting that Gates is also a major shareholder of New Enterprise Associates (NEA). This makes Gates even more of a dominant shareholder in the Microsoft group.
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