Understanding Shares and Share Capital
A quick guide to understanding shares and share capital in companies.
Shares are the smallest units of ownership in a company.
Share capital refers to the maximum number or value of shares a company can issue at a particular time. Share capital can be increased or decreased by the owners of the company.
These are shares that bear the liability of the company i.e. they are
the risk bearers of the company and are the equity shares of the company.
They are also referred to as founder shares and are usually acquired
by the promoters of the company. They are way cheaper than any other type of
A share which entitles the holder to a fixed dividend, whose
payment takes priority over that of ordinary share dividends.