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Difference Between Share and Stock

While stocks and shares are often used interchangeably, there is a distinction. A share represents a unit of equal ownership in a company's capital, profits, debts, and losses. Stock refers to the total capital of a company in the form of a fund that can be divided into any amount, and must be fully paid. The main differences are that shares can be partly paid, issued directly, have distinct numbers and equal denomination, while stock has no nominal value, is not numbered, and can be split into unequal amounts.

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461 views

Difference Between Share and Stock

While stocks and shares are often used interchangeably, there is a distinction. A share represents a unit of equal ownership in a company's capital, profits, debts, and losses. Stock refers to the total capital of a company in the form of a fund that can be divided into any amount, and must be fully paid. The main differences are that shares can be partly paid, issued directly, have distinct numbers and equal denomination, while stock has no nominal value, is not numbered, and can be split into unequal amounts.

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NazimReza
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as DOCX, PDF, TXT or read online on Scribd
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Difference between Share and Stock

In today's financial markets, the distinction between stocks and shares has been somewhat blurred. Generally, these words are used interchangeably to refer to the pieces of paper that denote ownership in a particular company, called stock certificates. However, the difference between the two words comes from the context in which they are used.

Share:
Share is a unit of ownership that represents an equal proportion of a company's capital. It entitles its holder (the shareholder)to an equal claim on the company's profits and an equal obligation for the company's debts and losses. The Bangladesh Company Act, 1994; 2(V) defines share like below: Share means a share in the capital of the company, and includes stock except when a distinction between stock and shares is expressed or implied.

Stock:
Stock is the proportional part of a company's equity capital represented by fully paid up shares. The Bangladesh Company Act, 1994; 53(1)C defines stock like below: convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares of any denomination.

Difference:
The stocks and shares are distinguished with the help of following points: 1. A share is one of a number of individual units into which the capital of a company is divided. Stock is the capital in the form of a fund which may be divided into any desired amount. 2. Shares may be partly or fully paid-up, but stock must be fully paid. 3. Shares can be issued directly but stock cannot 4. Shares have a nominal value, whereas stock has none. 5. Shares must bear distinct numbers, while stock is never numbered. 6. Shares are of equal denomination while stock may be split into unequal amounts. 7. Shares cannot be transferred in fractional amount; stock can be transferred in any fraction although the articles may provide the minimum fractional amount of stock which can be transferred.

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