What is Equity Share

If you are into investing world, Finance or Owns a Company , you must hered about the equity Shares, in most party of world also called as comman stock, In this article we will discuss about what is Equity Share in Detail.

equity share

What is Equity Share

Equity Share is type of ownership instrument in body corporate – company, It provide holders ownership right and directly represent capital of company. Companies are owned by shares called Equity and provides voting rights to holders of equity in the process of decision making, while most of decisions are made by Board of Directors of Company , the Holders of equity shares are the one who appoints board of directors of their company at general Meeting.

Equity shares are liablity of the Company and are required to be paid back to the holders in case of winding up of the company , if there exists surplus cash that can be distributed once every other liabliity sets off.

For Publicly listed companies equity shares are listed for trading and anyone can buy and sell anytime of excanges.

For private limited companies , these shares are brought and sold through private agreements.

Companies distrubute profits to equity shareholders by way of dividend and valuation of shares majorly for listed shares depends on stock prices.