What Is a Stock?

A share (also called capital stock) is a title that represents the ownership of a fraction of a company. This entitles the owner of the share to a share of the assets and profits of the company that corresponds to its shareholders. Units of shares are called "shares." Shares are bought and sold primarily on the stock market, foreign exchange market today. but there can also be private sales and form the basis of the portfolios of many private investors. These transactions must comply with government regulations designed to protect investors from fraudulent practices. Historically, they have outperformed most other long-term investments.



Understanding Stocks

Companies issue (sell) shares to raise funds to run their businesses. The shareholder (shareholder) has now acquired a share in the corporation and, depending on the type of shares he owns, may be entitled to part of its assets and income. In other words, a shareholder now owns the issuing company. Ownership is determined by the number of shares a person owns compared to the number of shares outstanding. For example, if a corporation had 1,000 shares outstanding and a person owned 100, that person would own and be entitled to 10% of the assets and profits of the corporation forex trading platforms in India.2 Shareholders are not corporate owners; they own shares issued by companies. But corporations are a special type of organization because they are treated as legal persons by law. In other words, companies collect taxes, they can take out loans, own property, be sued, etc. The idea that a company is a "person" means that the company has its own assets. A central office full of chairs and tables belongs to the company and not to the shareholders.3 This distinction is important because the ownership of the company is legally separate from the ownership of the shareholders, limiting the liability of the company and the company. . 'shareholder. about foreign exchange market you. If the business goes bankrupt, a judge can order the sale of all its assets, but your personal assets are not at risk. The court cannot even force you to sell your shares, even if the value of your shares has dropped dramatically. Even if a major shareholder files for bankruptcy, he cannot sell the company's assets to pay his creditors.

Stockholders and Equity Ownership

What shareholders own are shares issued by the company, and the company owns the assets that a company owns. So if you own 33% of the shares of a company, it is wrong to say that you own a third of that company; Instead, it is correct to say that he owns 100% of one-third of the company's shares. Shareholders cannot do what they want with a company or its assets. A shareholder cannot leave with a chair because that chair belongs to the company and not to the shareholder. This is called the "separation of ownership and control." Owning shares entitles you to vote at shareholders' meetings, to receive dividends (that is, company profits) when and when they are distributed, and you have the right to sell your shares to someone else.

Common vs. Preferred Stock

There are two main types of stocks: common and preferred. Ordinary shares generally entitle the owner to vote at shareholders' meetings and receive dividends paid by the company. As a general rule, preferred shareholders do not have voting rights, but they have a higher claim to assets and income than ordinary shareholders. For example, preferred shareholders (like Larry Page) receive dividends over common shareholders and take priority in the event that a company goes bankrupt and is liquidated.



Stocks vs. Bonds

Companies issue shares to obtain, deposit, or share capital to grow their business or execute new projects best broker in India for forex. There are important differences between buying shares directly from the company when they are issued (in the primary market) and from another shareholder (in the secondary market). When the company issues shares, it does so for money.

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