1. Introduction : The newly established company requirfixed capital for large scale production and to purchase fixed assets like land, building, machinery; furniture etc. Same way, after commencement of business, working capital is required for administration and production, selling and distribution expenses. To satisfy the need of working capital, bank loan, overdraft, public securities, financial institutions and short term securities are utilised.
2. Meaning and Definition of Share:
Meaning : A part or portion of larger amount of owner’s capital which is divided into small parts, each of the parts is called share. As per experts, share means shareholders implicable interest in monetary term.
Definition : As per the Company Act 2013, ‘Share’ means one part of capital which also include stock. Company divides its capital in small parts. That part is known as share.
As per the provision of company law, company invites general public to purchase share by issuing prospectus. Total amount received from general public along with share application is called share ca’pital. A person who owns shares in a company and therefore gets part of the company’s profit is èalled Shareholders.
3. Charactersitics of Share : The characteristics of share are as follows:
(1) Part of Share Capital: Share Capital of the company is divided in to small parts. Each part of share capital is called share.
(2) Form of Share: Share is a printed document. This document is called as share certificate. It includes name of the comapny, name of Shareholder, Number of Shares, Serial Number of Share certificate etc. information along with company seal.
(3) Interest in Company: Share represents shareholder’s financial interest in the company.
(4) Movable Assets: Share is a movable asset which can be sold or purchased. It can be given as gift or donation.
(5) Free Transfer: Share can be transferred freely. It is an important characteristics of a share.
(6) Right of Shareholder: The equity shareholder have a right to get notice of meeting to remain present in the meeting and have power to exercise voting rights.
(7) Responsibility of Shareholder : The shareholder has responsibility to pay face value of share.
4. Conclusion: Share is an important evidence showing ownership of the shareholder. It includes the signature of authorised director and a common seal of the company.