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Simple English definitions for legal terms
Share
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A quick definition of Share:
Share: A part of money or other capital that someone owns. When people start a business together, they each put in a certain amount of money and own a share of the business. This means they get a part of the profits. Big companies can also sell shares of their business to people who want to invest. These people then own a part of the company and can vote on important decisions and get a part of the profits too.
A more thorough explanation:
A share is a specific portion of money or other capital. In business, partners usually contribute a specific share of capital to their partnership, and are then owed a share of the profits. For example, if two partners start a business and one contributes $50,000 while the other contributes $100,000, they would each own a different share of the business and would be entitled to a different share of the profits.
Corporations can also issue shares of capital stock to increase the size of their budget. Corporate shareholders then own a portion of the corporation, along with a right to vote and receive their portion of dividends. For example, if a corporation issues 1,000 shares of stock and someone buys 100 shares, they would own 10% of the corporation and would be entitled to 10% of the profits and voting rights.
These examples illustrate how a share represents a specific portion of ownership or investment in a business or corporation.