Shares

Topic Content:

A share can be defined as the unit of capital structure of a company allocated to an individual. It is the financial security with a limited liability company that raises capital from the public.

A share is the individual portion of the company’s capital owned by the shareholders. They are given a certificate called a share certificate. A share has a normal value which is also called par value but the real value or market value depends on how much people are willing to pay to obtain the share in the market.

A shareholder is a person who purchases shares in a limited liability company and in doing so becomes one of the owners of the company. Shares offer potential capital appreciation and voting rights for important decisions, such as electing board members.

Types of Shares:

1. Ordinary Shares: 

These are equity shares that are usually issued when a company is newly formed. Ordinary shareholders are the real owners of the business, the risk bearers, they have no fixed rate of dividend.

The holders have the last claims to the distributed profits and receive their dividends only