Share Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Share, written in plain English, along with examples of how it is used.
What is Share?
(n) Share is defined as the segment, potion or other partition of a body, right or other wholeness which can be fractioned as identifiable or representable parts of the whole part. Eg. Share of profit in business. Share of property etc.
History and Meaning of Share
A share is a unit of ownership interest in a corporation or financial asset. Shares represent a claim on part of the corporation's assets and earnings. Shareholders are entitled to receive a portion of a company’s profits and to vote on matters such as the election of directors and the adoption of significant corporate policies.
The concept of shares dates back to the joint-stock companies of the early modern period, which were set up to fund voyages of exploration and colonisation. These companies were designed to limit the risk and liability of the investors, allowing them to buy shares in the company and share the profits according to their investments. This idea has evolved over time and today, shares are bought and sold on stock exchanges around the world as a way for companies to raise funds for growth and for investors to participate in potential profits.
Examples of Share
- John owns 500 shares of Company X, representing 5% of the company's total shares outstanding.
- The board of directors announced that the quarterly dividend per share would be $0.50 for all shareholders.
- Susan sold her shares of stock in Company Y when the price reached her target sell price.
- The company issued new shares of stock to the public in order to raise additional capital.
- The shareholder meeting was called to vote on a proposed merger of Company A with Company B, which would affect the ownership share of all shareholders.
Legal Terms Similar to Share
- Stock: A stock is a type of security that represents ownership in a corporation and a claim on part of the corporation's assets and earnings.
- Equity: Equity is the value of an asset after liabilities are subtracted. In the context of a corporation, equity represents the residual value of assets after liabilities are paid off.
- Dividend: A dividend is a portion of the company's profits that is paid out to shareholders in proportion to their ownership stakes.