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WHAT IS A SHARE???
“ by share in a company is not any sum
of money but an interest measured by
the sum of money and made up of
diverse rights
conferred on its share holders by the articles of
the company which constitute a contract between
him and company.”
Share capital is one of the units in which total
capital of company is divided.
WHAT IS STOCK???
Stock in a company means ‘ a bundle of
fully paid up shares put together for
convenience so that it may be divided into any
amount and transferred into fractions and sub
divisional without regard to original face value
of the shares.
A stock cannot issue the stock originally
and can only be obtained by conversion.
a. if shares are fully paid up
b. The articles empower the company to convert
shares
DIFFERENCE BETWEEN SHARE AND
STOCK
SHARE STOCK
A company can make an original A company cannot make an original
issue of shares. issue of stock.
The shares can be fully paid up or The stock must always be fully paid
Partly paid up. up.
The shares are always of fixed The stock has no such fixed
denomination. FOR EX..Rs 10 each denomination.
Registration of share capital with the A stock can be issued only after
registrar is compulsory before Passing a special resolution if
Issuing shares. articles permit.
Winding up On the winding up, they In this case, they have been
have a right to return of paid only when preferences
capital ahead (before) of capital is paid in full.
the capital returned on
equity shares.
Arrears of dividend If dividend is not paid on In case of equity shares,
these shares in any year, dividend cannot accumulate.
the arrear of dividend may
accumulate.
Voting rights Preference shareholders do Equity shareholders enjoy
not have any voting rights. voting rights.
SHARE CAPITAL