Equity Shares

Topics: Stock market, Stock, Debt Pages: 5 (1529 words) Published: March 20, 2010
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A share or stock is also known as an equity share as well. The equity share basically represents ownership in the company. When a company needs capital or money to operate, it generates the required funds by selling ownership in the company. This means that the company issues equity shares for a price and these shares represent ownership in the company for the one who purchases the shares. These shares are an ownership in the company and give the owner the right to have a share in the profits of the firm.

Equity shares are the part of share capital.
Particularly, equity shares r dose share which r traded in da stock markets. Dese shares carry voting rights.company gave u dividend as u hav invested ur money in their company.but it is not necessary that each year u ill get dividend. It only disrtibuted only wen company is in profits.these shares r fully transferable

Equity Share Holders get Equity Shares of the Company while Preference Share Holders get Preference Shares.

EQUITY SHARES are shares whose profit sharing depends on the PROFIT MAKING of the Company. If the company makes huge profits, there dividend sharing will be high else it will be low. Whereas for Preference Share Holders, Dividend is a fixed income to them.They get dividend at a fixed rate, irrespective of the Profit Making of the Company. Dividends to Equity Share holders is optional and at company's discretion. For preference share holder, it is a right to get cumulative or non cumulative dividends from the company.

Equity Shareholders are called RESIDUAL OWNERS of the company. After all the obligations of the company are over, the Equity Share Holders get their share. Preference Share Holders get paid their dividends ahead of Equity Shareholders.

features of equity shares are
1.they don't have no preferential right in respect of payment of dividend or in the repayment of capital at the time of winding of the company. 2.equtiy shares are risk bearing shares because they are the actual owners of the company when ever company run into losses they have to bear the losses. 3.equity share holders enjoys voting right whenever there is a meeting they will enjoy their voting power, enjoys voting power in electing board of directors. 4.equity capital is the permanent capital for the company . The company need not to return capital . Company has to repay the capital only at the time of winding up. 5.equity shares are easily transfer from one person to another at the stock exchange according to the procedure laid down in the article of association of the company. 6.company gives the bonus shares to the equity shareholders at a free cost on account of reserves . undistributed profits and accumulated profit 7.equity shareholder are give first priority when ever company want to raised fresh capital When you decide to start a small business, one of your first questions is likely to be how to raise money to finance your business operations. No matter how you plan to obtain financing for your business, you need to spend some time developing a business plan. Only then should you go forward with financing plans for even a simple small business.

Equity Financing

You may have some cash you want to put into the business yourself, so that will be your initial base. Maybe you also have family or friends who are interested in your business idea and they would like to invest in your business. That may sound good on the surface to you, but even if this is the best arrangement for you, there are factors you must consider before you jump in. If you decide to accept investments from family and friends, you will be using a form of financing called equity financing. One thing that you want to be clear about is whether your family and friends want to invest in your business or loan you some money for your business. That is a crucial distinction! If they want to invest, then they are offering you equity financing. If they want to loan you money for your...
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