share

One of a number of titles of ownership in a company. Most companies are limited by shares, enabling investors to limit their liability if the company fails to the amount paid for (or owing on) the shares. A share is a chose in action, conferring on its owner a legal right to the part of the company's profits (usually by payment of a dividend) and to any voting rights attaching to that share (see voting shares; A shares). Companies are obliged to keep a public record of the rights attaching to each class of share. The common classes of shares are: ordinary shares, which have no guaranteed amount of dividend but carry voting rights; and preference shares, which receive dividends (and-or repayment of capital on winding-up) before ordinary shares, but which have no voting rights. Shares in public companies may be bought and sold in an open market, such as a stock exchange. Shares in a private company are generally subject to restrictions on sale, such as that they must be offered to existing shareholders first or that the directors' approval must be sought before they are sold elsewhere. See also cumulative preference share; deferred ordinary share; founders' shares; fully paid share; partly paid share; preferred ordinary share; redeemable shares; subscription shares; term shares