📘 What is a Common Share?
A common share is a paper or digital proof that shows you own a small part of a company. When you buy a common share, you become a part-owner of that company and can also share in its profits.
🔹 Key Features of Common Shares:
- ✅ Ownership: You become a part-owner (shareholder) of the company.
- ✅ Voting Rights: You can vote in the company's AGM (Annual General Meeting).
- ✅ Dividends: You may receive dividends if the company makes a profit.
- ✅ Profit from Selling: You can sell the share at a higher price in the secondary market if its value increases.
🔴 Risks to Know:
- ❌ No Dividends: If the company doesn’t make a profit, you may not get dividends.
- ❌ Last Priority: In case the company shuts down, common shareholders are paid last.
🧩 Example:
If XYZ Company issues 1 million common shares and you buy 1,000 shares:
- 🔸 You own 0.1% of the company.
- 🔸 You may receive dividends if declared.
- 🔸 You can vote in the company’s meetings (AGM).
📊 Summary:
Common Share = Risk + Opportunity
If you are thinking long-term, common shares can be a good investment option. You get a chance for higher returns, ownership, and voting rights.
📌 Which is better?
- ✅ Want voting rights? → Choose Common Shares
- ✅ Want stable income? → Choose Preferred Shares
📢 Stay tuned to Trade4Nep for more share market knowledge in simple language.
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