AETHYRA

if you hear people talking about stocks, what they mean are actually certificate of stock or share certificate.  It is a legal document showing that the paper holder has a partial ownership in a business.  Most people calls this single stock certificate “share”.  Common stock is the most common among all types of stock or share.

But why are businesses selling their shares of stocks is a common questions for people new to this business.  Does it mean, in a way, that they are giving up their private ownership?  Actually all businesses sell shares because of one reason and that is to earn money they can use to build capital they can use for research and development, in purchasing new equipments or in building new factories.  Selling shares to public is a great way for them to generate enough money for the expansion of their business.

Now if a business decided that they need to sell 10,000 shares of stock and you own 100 of these shares, that means that you have 1 % control on the company.  However, even a small ownership in a company comes with responsibilities and priveleges.  By being a share holder, that means that you are entitled to a share of the profits gained by the company.  Some companies pay their stock holders in a yearly basis and others quarterly.