An overview of "shares" as an concept in Company laws.

1. SHARE
A share in a company is one of the units into which
the total capital of the company is divided
Section 2(46) of the Companies Act defines a share
“as a share in the share capital of a company, and
includes stock except where a distinction
between stock and share is expressed or implied”
A share is regarded as goods(movable asset) in
India.

2. Stock Versus Shares
• Stock
Stock in a company means ‘a bundle of fully paid
shares put together for convenience, so that it
may be divided into any amount and transferred
into any fractions and sub divisions without
regard to the original face values of shares’
A company cannot issue stock originally and the
stock can only be obtained by conversion – if
shares are fully paid, and the Article empowers.
Only shares fully paid-up can be converted in stock
Stock does not have fixed denomination.

3. Nature of Share
• Thus a share is a fractional part of the capital
of the company which forms the basis of
ownership of certain rights and interests of a
subscriber in the company.
• It is not a sum of money but an interest or
right measured in a sum of money to
participate in the profits made by the
company, or in the assets of the company
when it is wound up

4. Share capital
• Authorized Capital
• Issued Capital
• Subscribed Capital (Paid Up Capital)

5. Kinds of Shares
• Preference Shares
Cumulative Preference Shares
Non Cumulative Preference Shares
Participating Preference Shares
Non Participating Preference Shares
Convertible Preference Shares
Non Convertible Preference Shares
Redeemable Preference Shares
Irredeemable Preference Shares

6. EQUITY SHARE
• Equity Shares
Equity shares with voting rights
Equity shares with differential rights
(Class Rights)
Issue of securities at a premium
Issue of securities at a discount
Issue of sweat equity shares

7. Other Kinds of Shares
• Bonus Shares
• Rights Issue