QS Study

Share

Capital is the lifeblood of any business organization. For collecting capital, a company can issue shares. Share is a well-known term in the company. Share is the part of the company capital by selling company can collect capital.

Share is the company’s own capital. The total amount of capital of a company is accumulation by the shares. That is why share is the minimum single portion of a company capital. Public limited company raises its necessary capital by issuing shares in the stock exchange.

  • Common Company Act: “Share means a share in the capital of the company and includes stock except when a distinction between Mock and share is expressed or implied.”
  • Oxford Dictionary of Business: “Share is one of a number of titles of ownership in a company.”
  • Company Act 1913: “Share means a share in the capital of the company.”

Shareholders are the owners of the company but are not involved in the company management. Shareholders can elect the board of directors for managing the company perfectly.

According to company Act, shares are of three kinds which are as follows:

  1. Ordinary Shares;
  2. Preference Share;
  3. Deferred Shares

Share is traded on the stock market. But the single share price is being so small; shares are clustered in the lot and sold. By accumulating the single share, companies raise its capital. Share is the original source of company’s capital. The important fact is only the public limited company can issue shares to the stock exchange but the private limited company cannot.