Share, stock

A share is a piece of ownership in a corporation and gives the holder the right to vote at the general meeting and an opportunity to receive dividend. A limited company do not have to pay dividend on shares in the company, the shareholders may decide that the limited company need its equity investment for investments or to cover up for losses.

Shares is created for the first time when a limited company is formed and new shares can thereafter be created through a new share issue, a bonus issue or a share split. A subscription of new shares through a new share issue gives the limited company new capital, a company will not get new capital when there is a bonus issue or a share split.

A limited company may be private or public, a public limited company can have its shares listed on a exchange. Shares in private and public limited companies can be freely transferable on a secondary market, however, it is normally easier to buy and sell shares in public limited companies compared to shares in private limited companies.

A private limited company in Sweden must have a share capital of at least 50 000 SEK and a public company in Sweden must have a share capital of 500 000 SEK.

When you buy one or more shares in a corporation you will typically obtain a settlement note, in i private company you might also get a share certificate. Physical share certificates normally only exists in private limited companies, public limited companies handles shareholder information electronically. All shareholders must be recorded in a share register.

Shares in a limited company may be divided into different types, a-shares, b-shares, c-shares and preferred shares. A-shares and B-shares are the most common types in Sweden and the difference between them is usually only voting power.