Stock Definition
‘Companies’ and ‘Shares’ with limited liability
were devised during the colonial period to mitigate high risk and uncertainty
involved in the seafaring ventures. Shares enabled raising huge sums required
to fund expeditions from many small investors and limited liability protected
the investors from creditors accessing their personal properties in case of a
failed venture. Thus a share is ownership of a company into a tiny unit or block.
With the advent of stock exchanges the
shares got listed on the exchanges bringing a great amount of liquidity to
shares.
Stock is a term used to describe shares
in general while the word share is used in the context of a particular company.
For example you own shares of NMDC Ltd. or SJVN Ltd. You also own stocks of a
great number of Indian companies.
It is not uncommon, at least in India
that the two terms stocks and shares are used interchangeably.
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| A Share of 'The Empire Jute Company Limited" |
