A financial instrument that provides ownership in a company is known as a share. By owning shares, investors have the right to vote on management decisions and receive a portion of the profits as dividends. There are two main types of shares: ordinary and preferred.

Ordinary shares provide voting rights and participation in dividend distribution. The power to make decisions lies with the general meeting of shareholders, with each share granting one vote. Preferred shares, on the other hand, provide an advantage in profit distribution and priority in recovering losses in case of bankruptcy. However, they do not grant voting rights.

Shares serve two main purposes for a company. Firstly, they allow for capital raising, with the funds invested directly into the business for various purposes. Secondly, being listed on the stock exchange adds to a company’s reputation and transparency, attracting potential investors interested in trading.