What are Shares?

The term ‘shares’ can be best defined as ‘represented ownership in part of a company. When you buy a share in a company you become a joint owner of the business and share in the future of that business. This is also known as equity’.

Why Do Companies Issue Shares?

Companies issue shares to raise money from investors. This money is used for the development and growth of businesses of companies.
A Company can issue different types of shares such as ordinary shares, preference shares, shares without voting rights or any other shares as are permissible under the law. These give shareholders a stake in the company’s equity as well as a share in its profits, in the form of dividends, and a voting right at general meetings of shareholders.