What is the Difference Between Shares and Stocks? Shares and stocks are understood as same. While contextually they mean the same, by rule of books, they have different from each other. Sachin Karpe throws some light on their difference. Shares: Shares always have an equal denomination. They are a total number of units into which capital of company is divided. Example: If paid up capital of company is Rs. 100,000, it can distribute 1000 shares of Rs. 10 each. They have a nominal value and can be paid partly / fully. Sachin Karpe explains further.
Stocks: Stocks are nothing bust assets in the form of cash reserve that can be divided into any desirable figure. Example: company receives Rs. 100,000 as external investment and decides to keep Rs. 50,000 separately for issuing stock options to employees (ESOPs). It can issue 50,000 stocks of Rs. 1 each, 100,000 stocks of Rs. 0.50 each or any other combination. These are fully paid and can be split into unequal amounts.
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