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Share (finance)

society Maturity 11-13 Next article →

A share is a tiny piece of a company.

Greyhound stock certificate
Greyhound stock certificate

When you buy a share, you own part of that business. This makes you a shareholder.

Companies use these shares to raise money. The total amount of all shares is called share capital. A company can have many kinds of shares. Some are called equity shares. Others are called preference shares.

Sometimes, a company shares its profit with you. This payment is called a dividend. In India, people may not pay tax on these dividends. This is true for amounts up to 1 million INR. However, the company must pay a tax on that money.

In the past, people held paper to prove they owned shares.

Greyhound stock certificate
Greyhound stock certificate

This paper was a share certificate. Today, most shares are kept on computers. These systems are called central securities depositories.

People also look at the value of a share. The value is often the price people pay to buy it. If you own less than half of a company, you have less control. This can change how much your shares are worth.

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