What are shares?Terms related to Shares/Stocks.

In layman's language, a share may be a section of ownership during a company or a financial asset. Investors who hold shares of any company are called shareholders. Shares are units of equity ownership interest during a corporation that exist as a financial asset providing for an equal distribution in any extra profits, if any are claimed, within the style of dividends. Shareholders may additionally enjoy wealth gains if the worth of the corporate rises. Several business organizations need money to run their business. The amount of money required is called capital which is broken into smaller equal parts called "shares".Shares are also commonly known as Stocks. A share entitles the shareholders to an equal claim on the profit and losses of the company.

Terms related to Shares-:

• The portion of the annual profit of a company that is circulated among its shareholders is called the dividend.
• The initial value of the share that is designated to the public is called its Nominal value.
• The rate at which the share is sold or purchased in the capital market through the stock exchange is called the Market Value.

Why is the share announced by a company?

• New investments in the company.
• To increase the market estimate for the company.
• A way for an investor to trade shares.
• To earn profit and rank higher.

Why should you invest in Share Market?

See guys it's better to invest the money somewhere in order to earn a profit than keeping it in a savings account/bank. Though it's said that investing in the share market can be risky but you should always read the terms and conditions before investing. It's a good source to increase income through buying and selling shares. People invest in the share market because it offers a possibility that the share price will rise. Holding shares in a company with a rising share price is one way to achieve capital growth. Investing in stocks is an outstanding way to increase wealth.

Types of Shares-:

As per Section 43 of the Companies Act 2013, shares can be broadly classified into two types –

• Ordinary equity shares-

Ordinary or Equity share is the most popular type of share that a public company issues to raise capital. Generally, holders of ordinary shares enjoy voting rights, can attend general and annual meetings of a company, and are also entitled to a company’s extra profits. Shareholders also participate in the losses that a company suffers limited to their stake in a company. 

• Preference shares

Preference shares, generally known as preferred stock, are shares of a company's stock with dividends that are paid out to stockholders before common stock dividends are issued. If the company enters insolvency, preferred stockholders are entitled to be paid from company assets before common shareholders.