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Investments: What You Need To Know About Shares - Nairaland / General - Nairaland

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Investments: What You Need To Know About Shares by nairametrics: 12:51pm On Oct 18, 2017
Buying shares in a company is one of the many ways which people carry out investments. Shares by default represent the value of equity contributed to a company for the purpose of carrying out business. Also, after business has been carried out, shares represent the unit of distribution of the company profits. Holding the shares to a company simply means you are part of the members/owners of the company based on the quantity of shares that you own.

You can be a shareholder by:

Subscribing to the company’s memorandum of association at incorporation.
When an existing shareholder transfers his shares to you (share transfer)
When you receive them through bequeathal after the death of an existing shareholder(transmission)
By allotment through a public offer or private placement.
The most important thing you need to understand as a shareholder is that shares issued are a company’s way of raising funds. If a company therefore has an authorized share capital of N1,000,000 to run its business, they can only issue shares worth N1,000,000. So a company with a share capital of N1,000,000 who wants to issue its shares and wants the value of its shares to be N20 per share will only be able to issues 50,000 shares. Perhaps the interesting part is that shares which you voluntarily pick up from a company actually stand as a debt which you owe the company. So in the instance where you pick up 5000 shares values at N20 each, you’re indebted to that company to the sum of N100,000.00. You will be required to pay that amount of money so the company can use it to conduct business.

Owning shares also entitles you to the following among other things;

READ MORE: https://nairametrics.com/the-rights-of-a-shareholder-in-a-company/


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