What is Stock Shares relationship and what do they mean?
“Stock” is a general term used to describe the ownership certificates of any company, in general, and “shares” refers to a the ownership certificates of a particular company.
A business may declare different types (classes) of shares, each having distinctive ownership rules, privileges, or share values.
A company may list its shares on an exchange by meeting and maintaining the listing requirements of a particular stock exchange.
A shareholder (or stockholder) is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company.
A stock certificate is a legal document that specifies the amount of shares owned by the shareholder, and other specifics of the shares, such as the par value, if any, or the class of the shares.
A stock market is a market where company stock is traded between people who want to buy the stock and people who want to sell stock.
Additional shares may subsequently be authorized by the existing shareholders and issued by the company.
Both private and public traded companies have shareholders.
Bottom line, stocks and shares are the same thing.
Companies Companies are vital for a stock market to work! A company must be listed as a PLC (public listed company) for people to trade it’s shares at a stock market. Companies listed at the stock market are expected to strive to enhance shareholder value.
Generally, these words are used interchangeably to refer to the pieces of paper that denote ownership in a particular company, called stock certificates.
However, the difference between the two words comes from the context in which they are used.
In general, the shares of a company may be transferred from shareholders to other parties by sale or other mechanisms, unless prohibited. Most jurisdictions have established laws and regulations governing such transfers, particularly if the issuer is a publicly traded entity.
In other jurisdictions, however, shares of stock may be issued without associated par value.
In some jurisdictions, each share of stock has a certain declared par value, which is a nominal accounting value used to represent the equity on the balance sheet of the corporation.
In the United States, through the inter-market trading system, stocks listed on one exchange can often also be traded on other participating exchanges, including electronic communication networks (ECNs), such as Archipelago or Internet.
In today’s financial markets, the distinction between stocks and shares has been somewhat blurred.
It represents the residual assets of the company that would be due to stockholders after discharge of all senior claims such as secured and unsecured debt.
Just the same as a fish market where people want to buy and sell fish or a cattle market where cows are exchanged between buyers and sellers.
Ownership of shares may be documented by issuance of a stock certificate.
Shares are issued by a company to raise money (capital) to help plan for future projects or because the owner/s of the company want a big lump sum of money for themselves as a reward for the hard work they have put into building up the company! Shares represent a fraction of ownership in a business.
So, if investors say they own stocks, they are generally referring to their overall ownership in one or more companies.
Some stock exchanges you might have heard of include NASDAQ, LSE (London stock exchange) and the NYSE (New York stock exchange).
Stock exchanges are key companies that allow the stock market to work as efficiently as it does.
Stock is just a slice of a company/organization, if you own over 50% of the stock then you own a company.
Stockholders’ equity cannot be withdrawn from the company in a way that is intended to be detrimental to the company’s creditors.
Technically, if someone says that they own shares – the question then becomes – shares in what company? The desire of stockholders to trade their shares has led to the establishment of stock exchanges, organizations which provide marketplaces for trading shares and other derivatives and financial products.
The minor distinction between stocks and shares is usually overlooked, and it has more to do with syntax than financial or legal accuracy. The stock (also capital stock) of an incorporated business constitutes the equity stake of its owners.
The stock of a corporation is partitioned into shares, the total of which are stated at the time of business formation.
They list shares prices for thousands of companies, they list the bid/ask prices of shares and enable quick electronic transfers of shares between people.
To be listed as a PLC a company must meet strict financial requirements.
Today, stock traders are usually represented by a stockbroker who buys and sells shares of a wide range of companies on such exchanges.