Every company needs funds to start the business as well as to run the business. This funds a race from various modes. The funds can be raised in the form of loan from banks, money lenders or from investors. But there is an another way to raise funds from the public in the form of shares of the company.
The capital required for the company is divided in the form of shares of the company. Such capital is called as share capital of the company. Interested people invest their amount for purchasing these shares. The investors of such capital are called as shareholders of the company.
These shareholders are the owners of the company. They get a part of profit of the company at the end of the year in the form of dividend. If the company earns huge profits then these shareholders get a good amount of dividend. In case the company goes in heavy losses then these shareholders may not even get their invested amount of capital.
The shareholders being the owner of the company have the right to vote in the Annual General Meeting.
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