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The differences between stocks and shares

The differences between stocks and shares

April 3, 2024

The global market, transnational corporations and the banking system offer the possibility of selling or buying shares and participations to the interested parties. However, we live in a society alien to these terms; We listen to them daily but we are unable to detect or explain what they are.

In this article we will see exactly what is the difference between the shares and the shares .

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The differences between stocks and shares

In the general framework of globalization and the finances associated with going public , in which money flows and the economy has more and more ways of transforming reality, organizations can issue shares and participations to finance themselves. Let's see how they work and what their differences are.

What are the actions?

The shares in a company are the parts in which the initial capital is divided of one. That is, if the capital of 300,000 euros is paid by ten people, they are entitled to a value of 30,000 each. In this way, the individuals that contribute liquid for an economic activity will be called shareholders.

These shareholders are those who will have a decisive vote in the measures taken by the company, the strategy to be followed, the organizational model or the infrastructure that it may have. In addition, the actions are those that enhance the growth of this capital. The more money we have, more capacity of movement we can have in the financial market .

The actions are those that give direct benefit to their owners, always depending on the benefits or losses that may be had. You can also sell these shares at a different price than what was purchased. This means that if we contribute, for example, 300 euros in shares and the price of that share is on the rise, we can sell for 500 euros, if applicable.

In short, the actions determine the power of influence that is had over the society that has been created, and that influence is measured in percentages that determine the degree of importance or weight that our voice may have in the organization . The capital is transformed into influence in the decision making based on the percentage that you have of those that the entity has issued.

The shares

And what are the shares in the economy? In this case the shares clearly differ from one thing with the shares : You do not have the power to influence any type of executive, administrative or economic decision on the activity in the company or organization where those attributes are held.

Simply, the taxpayer contributes a certain amount , in the terms that are agreed between the company and the participant. The holder of the participations will benefit from an annual sum of money that will compensate his investment. Regardless of whether the company in question turns out to have losses or benefits, the remuneration of the participations will be fixed and annual. A balance will be made at the end of the fiscal year after twelve months.

Another distinguishing feature between the shares and the shares is that the latter are, at first, perpetual in nature. That is, you have to negotiate with the manager or CEO of the company in case you want to terminate a participation contract, and both parties must be in mutual consent.

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Who can be a shareholder or have shares?

Very often we tend to think that only experts in economics have the opportunity to develop an activity of such caliber. But nevertheless, Any person or individual of a legal nature has the right to obtain shares or be a shareholder occasional. It is recommended, for the user's peace of mind, to consult and learn correctly for a business practice.

According to the latest reports and research from economists and professors specialized in the securities market, there is a worrying legal ignorance among people who enter the world of finance. Their rights are often ignored, given the complexity and degree of interpretation subject to the conditions in participations and actions.

What's The Difference Between Shares and Stocks? (April 2024).

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