Generally, an investor purchases equity stocks through an online brokerage firm or directly from a broker. However, some investors in order to save brokerage fees, purchase stocks directly from the company.

Buying stocks directly from the company is called a direct investment plan. Investors have their own reason for investing directly in a company such as physical possession of the stocks, eliminating brokerage services or broker, low cost, and various other reasons.

How can one invest directly with the company?
One can directly invest in the company, through a direct stock purchase plan, a dividend reinvestment plan, and an employee stock purchase plan.

Direct stock purchase plan
When an investor buys stocks directly from the company, it is referred to as direct stock purchase (DSP). Very few companies offer these services, while some may want you to be an employee of the company or a former stockholder of the company. Most company stocks are available through the brokerage house only. The advantage of DSP is that investors can save on commission since most companies do not charge them and even if some do charge; it is very low compared to what brokerage houses charge.

DSP is the best for those investors who need stocks of a particular company in a small quantity. When it comes to selling these stocks, the company can buy back their shares at a nominal fee of around $10 to $30 per share.

Dividend reinvestment plan
The company offers an option to reinvest the dividend earned from those shares, an investor purchase from them. Here, the company, instead of giving the dividends back to the client, reinvests them to buy more shares. Reinvesting the dividend into shares is called a dividend reinvestment plan (DRIP). This plan works for an investor, as he can add additional shares of the company without any further investment from his side and even getting away with the commission. However, before going ahead with this plan, the company may want to enter into an agreement with investors. Dividend reinvestment plan works on the principle of the power of compounding interest. Know about the company policies regarding the enrollment rules, as of how many shares can one reinvest, and other information.

Employee stock purchase plan (ESPP)
This plan is for employees of the public company, who can buy the shares of the company at a discounted price. This plan is executed by employee payroll deductions with effect from stock offering date and purchase date. There are certain proportions of stocks reserved for employees. ESPP is a tax-efficient means of investing in a company. However, it is recommended not to hold too many company shares, as it is quite risky. Companies offer their employees under ESPP, the option to buy the stock at 85% of the market value. The employees can have the advantage of transferring these company stocks to their company retirement account.

Today, when brokerage services are easily available online, there is still some section of investors that prefers to invest directly in the company via these methods.