Stocks and stocks are two words that we often talk about in life. However, many people confused and cannot distinguish these two words. So what is the difference between shares and stocks? The following article will answer this problem for you.
Legal grounds
– Enterprise Law 2020
Consulting content
Today, many people still confuse and misunderstand shares and stocks, but these two words are legally different, specifically different in the following points:
Concept
Share means the smallest division of the charter capital of a joint-stock company. Shares which expressed in the form of shares; the holder of shares is called a shareholder
Shares are certificates issued by a joint-stock company or journal entries confirming the ownership of one or several shares of that company. Stockholders become shareholders of that company.
As can be seen, shares are the expression of shares; In logic, stocks and shares have a category relationship of form and content.
Validity
Shares are the basis for the capital contribution of members in a joint-stock company and also the legal basis for proving that they are shareholders of such a joint-stock company.
There are different types of shares depending on the agreement of the founding shareholders when establishing the company. And corresponding to each type of share, shareholders have different legal rights and obligations. At the same time, proving the ownership of shares in a joint-stock company will be shown in the shareholder book.
So, Stocks are grounds for owning shares. Shares are commonly used by companies that have gone public.
Denominations
Shares do not have a fixed par value, decided by the company and recorded in the shares. The par value of the shares may differ from the offering price of the shares. The Board of Directors shall decide on the offering price of shares of the joint-stock company but must not be lower than the market price at the time of offering; except for the case of shares offering for the first time to people who not founding shareholders; shares offered to all shareholders in proportion to the company’s existing shares; shares offered to a broker or guarantor.
The par value of shares offered for the first time to the public is ten thousand Vietnamese dongs. The par value of bonds offered to the public is one hundred thousand Vietnamese dongs and a multiple of one hundred thousand Vietnamese dongs.
Classify
Shares that divided into two types: Ordinary shares (must have joint-stock companies); Preference shares: voting preference shares, dividend preference shares…
Based on the form of shares, stocks are classified into two types:
▪ Registered shares: are shares with the owner’s name written on the stock sheet. This stock has the disadvantage that the transfer is complicated, it must be registered at the issuing agency and must be approved by the Board of Directors of the company.
▪ Anonymous shares: shares that do not bear the owner’s name. These shares are freely transferable without legal formalities.
Besides, as mentioned above, shares are the expression of shares, so the regulated shares have the following main contents:
– Name, address, and head office of the joint-stock company;
– Number and date of issue of the business registration certificate;
– Number of shares and type of shares;
– Par value per share and total par value of the number of shares recorded on the share;
– Information about the shareholder’s identity; information about shareholders being organizations;
– Summary of share transfer procedures;
– Signature of the legal representative and seal of the company.
– Registration number at the register of shareholders of the company and date of issue of shares.
– Some other contents as prescribed by law.
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Investors contribute capital, buy shares, buy capital contributions in Vietnam
Frequently asked questions
Securities include bonds, stocks, fund certificates; the right to buy shares, warrants, put options, futures contracts, groups of securities or stock indices; investment capital contribution contracts; other securities.
Shares are the basis for the capital contribution of members in a joint-stock company and also the legal basis for proving that they are shareholders of such a joint-stock company. There are different types of shares depending on the agreement of the founding shareholders when establishing the company. And corresponding to each type of share, shareholders have different legal rights and obligations. At the same time, proving the ownership of shares in a joint-stock company will be shown in the shareholder book.
So, Stocks are grounds for owning shares. Shares are commonly used by companies that have gone public.
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