What is the difference between Share and Stock ?

What Is Shares and Stock?

There is no major difference between Shares and Stocks, they are considered as the same terms, having same meanings and sometimes used in replace of each other, a minor change lies in the definition of both terms as the Shares are the certificates of a specific company that an investor holds as an ownership whereas the term Stock refers to an expression that is used for the shares.

As stocks are the rights to the specific certificates whether they are in form of dematerialized or in physical form, so now it is cleared that stocks actually are the shares of a specific company. Basically, a person can have the ownership of stocks of more than one company that also means the same like a person has possession in certificates of different companies but having ownership of stock means having the rights of shares of a particular company. So we can say that shares and stocks are somehow and other is the same things but difference lies in the situation where they are use i.e. generally or specifically.

Well, stocks are divided into 3 main types: 1: Common Stock, 2: Preferred Stock and 3: Convertible Preferential Stocks

Common stock

They are the basic types of stocks they have three basic features:

  • It gives rights of ownership to the person who holds them
  • Owners of the stocks are usually entitled-according to their stakes- to the earnings of the company
  • Dividend (profit on shares) is given by the company to its share holders

Preferred stock

Following are the features:

  • Right of ownership is also given to the holder of preferred stock
  • Main advantage that owner gets is the right of getting the dividend than before the holder of common stock

Convertible preferential stocks

The main thing that differentiate this with other types is :

  • These stocks can be converted into the common stock as per the demand of the holder

The person who buys the ownership of the certificates is entitled to the shareholder, a share holder of a specific company is also said to be the owner of the company, but ownership rights vary from person to person according to the number of stocks they are having and it also decides the their right to vote and decision making.

Actually stock is nothing but the actual thing is the certificates that is a proof and indicates the right of ownership of a person. Certificates are of two types:

Physical Stock Certificates

This type of certificates is just the piece of paper at which name of the company, name of stock holder and terms and conditions are written. These are the forms of stock that now discarded because of difficulty of protecting them, wastage of time and much more.

Dematerialized Stock Certificates

A modern type of certificates that is widely used around the world now a days, instead of having physical papers as certificates now certificates are transformed into the electronic form and it is deposited into D-Accounts.

So, we can say that both shares and store are the same things with little difference of conditions in which they are used.

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