Widening the ownership base of companies is imperative to bring about all inclusive socio economic development i11 a country. Following the reintroduction of 'fiee market economic policy in Ethiopia. the formation, and expansion ofprivate business organization has a recent history. This study examines the need. prospects and challenges nj widening the ownership base of share companies in Bahir Dar City Administration. The paper consults both doctrinal and empirical evidences and came up with the result thatsliare companies in Bahir Dar city Administration have narrow ownership base with the limited participation of the public. '171e low shareholding investment of the public in Bahir Dar is 1101 because of unwillingness of the public but inability of the public to invest.Share companies in Bahir Dar City Administration are categorized us "non market center .. share companies with less thanfifiy shareholder» and "market center' share companies with misdeeds. Indeed, all share companies in the city are characterized by private subscription of shares and narrow ownership base. Absence of sound legal. institutional and policy framework, the growing trend of "market center" share companies and lack t?l public awareness about shares and share investment, this paper argues. are the major challenges for widening the ownership base of share companies in Bahir Dar city. This paper recommends that legislatlve measures have to he taken i11 order to protect investors and hons/ the shareholding investment of the public. it suggest the separation of business from polisics and recommend the government to stay away from actions affecting the well development of stock market. Moreover, the papers recommend the ARNS trade bureau to conduct public awareness creation programs. Key words: Ownership, Share Companies. Shareholders. Widening Ownership Base