For all intents and purposes, stock and stock refer to the same thing. Some differences between stock and share are generally overlooked and have more to do with syntax than financial or legal accuracy. If you want to invest in stocks, more specifically, if you want to invest in a company’s stock, you need your own trading account.
Stock:
Stocks (also called capital) are securities that show ownership of a portion of a company. This allows stock ownership to obtain a percentage of the company’s assets and profits that is equivalent to the amount of stock it owns. The unit of stock is called “stock”. shares are bought and sold primarily on the stock exchange, but can also be sold individually, which is the basis of the portfolio of many individual investors.
These transactions comply with government regulations to protect investors from fraud. Historically, they outperformed most other investments in the long run. These investments can be purchased from most online stock brokers. Shareholders do not own a corporation. They own shares issued by the company. However, a company is a special type of organization that is treated as a legal entity by law. That is, companies can file taxes, borrow, own property, and be prosecuted. The idea that a company is a “person” means that the company owns its own assets.
“Shares” is a more general term often used to describe ownership of multiple companies. In contrast, the general term “shares” has a more specific meaning. Often represents ownership of a particular company.
A share is the smallest unit of stock in a company. Therefore, when splitting a stock and describing a particular characteristic, the proper term used is share.
Technically speaking, a shares represents a unit of stock. Common and Preferred represent other classes of company stock. They have other rights and privileges and trade at other prices. For example, a typical shareholder can vote for a company vote and for employees. You do not have the voting right to give priority shares, but you have the priority to repay if the company goes bankrupt. All types of shares can be paid dividends, but once the dividend is declared, the class shares will be paid first.
| Stock | Share |
|---|---|
| Meaning | |
| Stocks are the ownership of the company or multiple companies | Shares are the unit of Stock of a particular company. |
| Denomination | |
| Two different stocks of a company may or may not have same value | Two different shares of a company can have same value |
| Issues | |
| Issues are possible in stock | Issues are not possible in shares |
| Nominal Value | |
| Stocks has no Nominal value | Shares are associated with Nominal Value. |
| Paidup Value | |
| Stocks are fully paid up | Shares are partially paid up or sometimes fully paidup. |
| Term | |
| Stock is a generic term | Share is a specific term. |
Conclusion:
Stock and Share are the most common terms used in the financial transactions. Mostly in the Stock market these terms like Stock and Share, Investment and speculation, intra day trading and trading are heard. Both the stock and share have their differences but in common they are traded in the financial markets.
If you want to read more about Difference between Investment and Speculation click here.
