How do Shares work?
Break down corporation shares for me. I'm completely ignorant. I challenge you to make me understand! In fact! You should write a hub about it!
Somebody is going to make this difficult like matters of issuance verses authorized and dilution and derivatives and hedging and short selling.
But here is a fun one for you: Shares are sharing part of something.
Remember when you were little and you had to do time sharing with toys?
If you were an only child (a sole owner of things) you did not need to share.
That makes that nice and simple!
But I don't think I can apply that to my company. We're trying to figure out how to divvy up funds, we have 4 members, though 2 are silent partners, and the other two do the work.
Friend, it is still so easy. 4 is no biggie. I suggest you issue 1 million shares. (that number is so big it fun) and then fight about who gets how much. If your silent friends put in money and you put in a bunch of time, figure it out, it is fun.
If you were speaking about shares of common stock the answer would be too simple. In your case you need to look at the papers everyone signed when you incorporated. Are you liquidating, as in dissolving the company? or dividing profits? These should be spelled out in your letters of incorporation. My first piece of advise is talk to an attorney-one who specializes in Corporate Law. Different states have have their own laws concerning such things and it's never a good idea to assume anything. That's the best I can do with the information I've got.
"Stocks or shares as some people call them are the same thing, which is basically a share in the ownership, assets and earnings of the underlying company. If you own a share of a
company’s stock, you are now a part owner of the company. As you purchase more of the company’s stock, your portion of ownership and dividends increases. The importance of
owning stock is your claim on the company’s assets and earnings. Without this claim, the stock that you own will be worthless.
That means if you bought shares in Microsoft, you are a small shareholder in the
Microsoft Company. Being a shareholder, entitles you to any voting rights attached to the stock, as well as a small percentage of everything that the company owns. Yup, so
technically, you own a very small part of every trademark, program, or sale the company makes. (Wipe that smile off your face, the portion you get is only equivalent to what you own. ☺)"
You can make money buy going long, short or on the dividends.
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