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A stock, also referred to as a share, is commonly a share of ownership in a joint stock company. The owners and financial backers of a company may desire additional capital to invest in new projects within the company. If they were to sell the company it would represent a loss of control over the company.

Alternatively, by selling shares, they can sell part or all of the company to many part-owners. The purchase of one share entitles the owner of that share to literally a share in the ownership of the company, including the right to a fraction of the assets of the company, a fraction of the decision-making power, and potentially a fraction of the profits, which the company may issue as dividends. However, the original owners of the company often still have control of the company, and can use the money paid for the shares to grow the company.

In the common case, where there are thousands of shareholders, it is impractical to have all of them making the daily decisions required in the running of a company. Thus, the shareholders will use their shares as votes in the election of members of the board of directors of the company. However, the choices are usually nominated by insiders or the board of the directors themselves, which over time has led to most of the top executives being on each other's boards. Each share constitutes one vote (except in a co-operative society where every member gets one vote regardless of the number of shares they hold). Thus, if one shareholder owns more than half the shares, they can out-vote everyone else, and thus have control of the company.

However it should be noted that owning 51% of shares does not mean that you own 51% of the company, you just have 51% of the votes. The company is considered a legal person, thus it owns all the buildings, equipment and materials itself. A shareholder has no right to these without the companies permission, even it they own almost all the shares. This is important in areas such as insurance, which must be in the name of the company not the main shareholder.

Financing a company through the sale of stock in a company is known as equity financing. Alternatively debt financing can be done to avoid giving up shares of ownership of the company.

Shares of stock are usually traded on a stock exchange, where people and organisations may buy and sell shares in a wide range of companies. A given company will usually only trade its shares in one market, and it is said to be quoted, or listed, on that stock exchange. However, some large, multinational corporations are listed on more than one exchange. They are referred to as inter-listed shares.

There are several types of shares, including common stock, preferred stock, treasury stock, and dual class shares. Preferred stock, sometimes called preference shares, have priority over common stock in the distribution of dividends and assets, and sometime have enhanced voting rights such as the ability to veto mergers or aquistions. A dual class equity structure has several classes of shares (for example Class A, Class B, and Class C) each with its own advantages and disadvantages. Treasury stock are shares that have been bought back from the public.

A stock option is the right (or obligation) to buy or sell stock in the future at a fixed price. Stock options are often part of the package of executive compensation offered to key executives. Some companies extend stock options to all (or nearly all) of their employees. This was especially true during the dot-com boom of the mid- to late- 1990sCenturies: 19th century 20th century 21st century Decades: 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s Years: Events and trends Computers, technology Explosive growth of the Internet; decrease in the cost of computers and other techn, in which the major compensation of many employees was in the increase in value of the stock options they held, rather than their wages or salary. This is still the major method of compensation for CEO's.

The theory behind granting stock options to executives and employees of a corporation is that, since their financial fortunes are tied to the stock price of the company, they will be motivated to increase the value of the stock over time.

The first company that issued shares is considered to be the Dutch East India CompanyThe Dutch East India Company Vereenigde Oostindische Compagnie or VOC in Dutch, literally "United East Indies Company") was established on March 20, 1602, when the government of the Netherlands granted it a monopoly to carry out Dutch colonial activities, in 1602For the Marvel comic, see 1602 (comic). Events February 14 William Shakespeare First performance of Twelfth Night on Candlemas March 20 The Dutch East India Company is established as The United East India Company by the Dutch States-General May 15 Bartolo.

See also: Equity investmentEquity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisiti, American Depositary ReceiptAn American Depositary Receipt ADR is how the stock of most foreign companies trades in United States stock markets. Each ADR is issued by U. depositary banks and represents one or more shares of a foreign stock or a fraction of a share. If investors own, Stock valuationThere are several methods used to value companies and their stocks. They try to give an estimate of their fair value, by using fundamental economic criteria. This theoretical valuation has to be perfected with market criteria, as the final purpose is to d, Share prices