QUESTION 25. EXPLAIN THE TERM SHARE IN THE COMPANY AND DIFFERENTIATE IT WITH STOCK .
ANSWER 25. MEANING OF SHARE : The capital of the company is divided into a number of indivisible units of a fixed amount . These units are known as share.
Section 2(46) defines, " A share is a share in the share capital of a company and includes stock except where a distinction between stock and shares is expressed or implied. "
Shares represents movable property and share bears a distinctive number and it is not the same as share certificate number.
DIFFERENTIATION BETWEEN SHARE AND STOCK
SHARE. STOCK
1. A share may be either partly 1. Stock is always fully paid up.
Paid up or fully paid up.
2. Shares can be issued originally 2. Stocks can't be issued originally.
to the public.
3. A share has a nominal value. 3. A stock has no nominal value.
4. A share can't be transferred in 4. A stock can be transferred in fractions.
fractions.
5. All the shares are of equal 5. The stock may be of unequal amount.
denomination.