'SHARE' THE WORD ITSELF MEANS A PART OR A FRACTION OF A WHOLE ENTITY. LETS TRY TO UNDERSTAND WHAT SHARES ARE WITH A SMALL EXAMPLE. LETS SAY A CHOCOLATE MANUFACTURING COMPANY BY THE NAME DINGDONG (JUST AN EXAMPLE) WANTS TO START A NEW MANUFACTURING UNIT AND EXPAND ITS BUSSINNESS.THE MOST IMPORTANT FACTOR FOR THIS NEW VENTURE WILL BE GENERATING THE FINANCE NEEDED.
NOW ONE OF THE METHODS TO RAISE THIS FUND IS BY OFFERING MINOR PARTNERSHIPS IN THE COMPANY TO MULTIPLE PARTNERS. IN SHORT MANY PEOPLE WILL PROVIDE SMALL AMOUNTS TO BUILD THE NEW COMPANY,IN TURN THEY WILL BE GIVEN PARTNERSHIPS IN THE COMPANY PROPORTIONATE TO THE FUND THEY PROVIDE. IN ECONOMICAL TERMS THESE PEOPLE ARE CALLED SHARE HOLDERS OF THE COMPANY.NOW COMPANY'S PROFIT WILL BE SHARE HOLDERS PROFIT AND SAME ABOUT THE LOSS.
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