We explain what an action is and the types of actions that exist. Also, what do common shares consist of?
What is an action?
At financial medium, is known as a share to a security issued by a specific company, and that is equivalent to the monetary value of one of the equal parts into which the company's capital stock is fragmented. business.
That is to say: actions are documents of investment that assign to its holder the ownership of a portion of the capital social, which will be higher the more shares you have. The holders of these securities are known asshareholders.
Commonly, the shareholders of a company have political rights (vote in the shareholders' meetings to decide the business management), and economic (receive benefits from the company and eventually earn profits in relation to the number of titles they handle).
However, as the shares are usually freely transferable, there are usually majority and minority shareholders, the former always with greater decision-making power when managing larger portions of the business capital stock.
The return of the shares, that is, the money they generate for their holder, is usually considered an investment in equities, that is, it lacks a fixed payment determined by contract beforehand, but it varies according to the performance of the company and, obviously, the number of shares held. But all the shareholders of a successful company receive financial benefits from it.
The purchase and sale price of a share will depend on the financial situation of the company at the time of the transaction. In many cases, the purchase of cheap shares and their subsequent sale at a higher price is an indicator of good commercial performance, which is why their holding is part of the assets of each investor. Said value has different mechanisms to be quantified and assigned, as occurs in stock indices (the stock market).
Types of actions
There are the following types of actions:
- Common or ordinary. They give the holder participation in the business patrimony and the right to speak and vote in the corporate meetings of the company.
- Preferential. Stocks with a dividend rate are generally fixed, with a preference to pay over the common ones, for various financial reasons.
- Limited vote. They give the holder the right to vote only in certain business matters, in exchange they are usually preferred or give a higher dividend than common shares.
- Convertibles. Those stocks that can be converted into bonds (although it usually happens the other way around).
- Industry. Instead of contributing capital to the company, the holders contribute services or a specific job and receive shares of it in return.
- Released. Those that do not require payment by the holder, since they are the payment of benefits or utilities that he should have received.
Common actions
Common shares are, first and foremost, financial assets. They have no expiration date, are fully negotiable, and represent a small portion of company ownership.
Its issuance usually responds to urgent financing needs of the same, but it is the most expensive way of raising funds that there is, since the returns that are generated in the future will have to allocate a part to the benefit of the shareholders.
Moreover, selling shares means losing somehow the autonomy of the company, since shareholders generally gain a voice and vote in the decision making.
Shareholders also have a responsibility limited in the company, that is, your personal assets will not be in risk before the performance of the company nor will they automatically form part of the total equity of the same.
In this way, a common shareholder will not be able to lose more than his economic contribution to the company (equivalent to a defined number of shares purchased, for example).