By Investing in shares in a public company, which has registration in a stock exchange an individual can get a share in the future income and value of the company. The capital of the company’s business is divided into a large number of equal parts called shares.
The people who buy these are the shareholders of the company. Shares represent ownership in a company. It is also called as equity and preference shares. Investing in shares, you become a part owner of the company and have the share in future value and profits.
1.Your share value increases as value of the company increases.
2.Profits to share to the investors known as dividends. The income payments are the dividends. They do not take this money as reinvestment for the company.
3.These dividends are taxed effective.