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Legal Dictionary

share

Legal Definition of share

Noun

  1. A portion of a company bought by a transfer of cash in exchange for a certificate, the certificate constituting proof of share ownership. Persons owning shares in a company are called "shareholders". There are two basic kinds of shares: common and preferred. A shareholder is not liable for the debts or other obligations of the company except to the extent of any commitment made to buy shares. The two other benefits of shares include a right to participate in profits (through dividends) and the right to share the residue of assets of the company, once liabilities have been paid off, if it is ever dissolved.

Definition of share

Pronunciation

Etymology

    From Middle English schare, schere, from Old English scearu (“a cutting, shaving, a shearing, tonsure, part, division, share”), from Proto-Germanic *skarō (“a division, detachment”), from Proto-Indo-European *(s)ḱar-, *skar- (“to divide”). Cognate with Eastern Frisian skar, sker (“a share in a communal pasture”), Dutch schaar (“a dab, pair of scissors, claw”), German Schar (“band, troop, party, company”), Icelandic skor (“department”).

Noun

share (plural shares)

  1. A portion of something, especially a portion given or allotted to someone.
  2. (finance) A financial instrument that shows that one owns a part of a company that provides the benefit of limited liability.

Verb

share (third-person singular simple present shares, present participle sharing, simple past and past participle shared)

  1. To give part of what one has to somebody else to use or consume.
  2. To have in common.
    They share a language.

  3. To divide and distribute.
  4. To tell to another.

Further reading

A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in the company becomes one of the owners of the company. Thus, a share is an indivisible unit of capital. It expresses the proprietary relationship between the company and the shareholder. The denominated value of a share is its face value: the total capital of a company is divided into number of shares.

In financial markets, a share is a unit of account for various financial instruments including stocks (ordinary or preferential), and investments in limited partnerships, and real estate investment trusts. The common feature of all these is equity participation (limited in the case of preference shares).

References:

  1. Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.



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