Question

State any 4 features of shares.

Answer the following question.

State the features of shares.

Answer 1

Following are the features of Shares:

1.  Meaning: Share is the smallest unit in the total share capital of a company.
2. Ownership: The owner of the share is called a shareholder. It shows the ownership of a shareholder in the company.
3. Distinctive Number: Unless dematerialised, each share has a distinct number for identification. It is mentioned in the Share Certificate.
4. Evidence of title: A share certificate is issued by a company under its common seal. It is a document of title of ownership of shares. A share is not any visible thing. It is shown by share certificate or in the form of Demat share.
5. Each share has a value expressed in terms of money. There may be:
   (a) Face value: This value is written on the share certificate and mentioned in the Memorandum of Association.
   (b) Issue price: It is the price at which the company sells its shares.
   (c) Market Value: This value of a share is determined by demand and supply forces in the share market. Rights A share confers certain rights on its holder such as the right to receive the dividend, the right to inspect statutory books, the right to attend shareholders' meetings, and the right to vote at such meetings, etc.
6. Income: A shareholder is entitled to get a share in the net profit of the company. It is called a dividend.
7. Transferability: The shares of a public limited company are freely transferable in the manner provided in the Articles of Association.
8. Property of Shareholder: Share is a movable property of a shareholder.
9. Kinds of Shares: A Company can issue two kinds of shares:(a) Equity shares.
   (b) Preference shares.
10. Rights: A share confers certain rights on its holder such as right to receive dividend, right to inspect statutory books, right to attend shareholders’ meetings, and right to vote at such meetings, etc.