What is a share?

A Share is a portion of ownership in a company.

In order to understand what a share is, we need to understand first what a company is.

A Company is a legal entity that allows its owners to conduct business under a separate legal identity, limiting their personal liability.

The original founders usually fund the newly created fictional identity with initial resources such as money and in exchange, a share of the control over the company and part of the assets in the new fictional identity are issued.

Thus, if five founders contributed $100 for the new company in equal parts; each one will get 20% of the total share of the new company.

Shares are usually “Issued” in financial terms. Therefore, if the company issued 10 shares of $10 value, each founder will get from the company 2 shares, $10 each.

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