KNC501/KNC601 Constitution of India, Law and Engineering

Chapter 17: Sole Traders and Partnership

Unit 1

Unit 2

Unit 3

Unit 4

Unit 5



A share is a unit of ownership delivered by a capital company. In most cases, it is a commercial company with a limited liability. Holding one of several shares – in other words, being a shareholder means that you own a part of the company’s capital but you are not held personally liable for the company’s debts.

Generally, shares are freely negotiable and transferable. As a shareholder, you can decide at any time to sell all or some of your shares to other investors. You can sell them or buy them at a stock exchange if the company is listed on a regulated market or in a private exchange (in this case, the transaction takes place between the vendor and the buyer).

Different types of 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: …

Shares vs. Stocks:

The distinction between stocks and shares in the financial markets is blurry. Generally, in American English, both words are used interchangeably to refer to financial equities, specifically, securities that denote ownership in a public company. (In the good old days of paper transactions, these were called stock certificates). Nowadays, the difference between the two words has more to do with syntax and is derived from the context in which they are used.

Some of the benefits of investing in shares

  • Capital Growth. Selling a share for more than you paid for it is known as Capital Gain. …
  • Dividends. Dividend is a cash reward given out to shareholders as part of the profit made by the company at the end of each financial year. …
  • Liquidity. …
  • Shareholder Benefits.

Author – Dilip Kumar Rawat

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