Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Share Vs Stock ??? Differance ???

Amit Ingale (Student CA Final) (1454 Points)

21 October 2009

What is the differance between Share and Stock ???

also explain with the an example.

thanks in Advance.

Reply
Follow
Share

15 Replies

Deeps (Article Assisstant) (2485 Points)
Replied 21 October 2009

A stock represents a tiny actual fractional ownership in a real company. Shares are usually parts ownership in a mutual fund.

Upgrade to CAclubindia Pro. Subscribe Now!

MOHIT MAHAJAN (LCS, ACA) (2050 Points)
Replied 21 October 2009

In general sense you can assume same meaning for them.

However in strict sense Stock is a wider term than share. For exp. you can say i am stock holder of reliance having 100 shares of RIL & 50 shares of RPL.

You can also use stock for refering shares of different cos. i.e. i have 100 shares of reliance, 200 shares of tata, 50 shares of infosys etc. collectively i can term it as my stock. Its similar to "portfolio" and "asset"

Term "stock" can also be used to signify ownership of shares of a single co.

for exp- i can say that i am stock holder of infosys. if I specify the exact no. of units I hold in infosys then that will be called shares.

thus use of stock/shares varies depending on your statement

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 21 October 2009

nicely expained Mr Mohit Mahajan

Amit Ingale (Student CA Final) (1454 Points)
Replied 21 October 2009

Thanks for the reply to All.

can anybody tell me exact legal definition of those two terms?

And any specific provision dealing with those terms individually.

and whn one can say Company has issued shares or Stock ?

Amit Ingale (Student CA Final) (1454 Points)
Replied 21 October 2009

I think there is some provsion in the Companies Act 1956, regarding conversion of shares into Stock and vice vesa.

but i am not confirmed the existance of those provision and if there are which are those provision.

Upgrade to CAclubindia Pro. Subscribe Now!

CMA RAVI GUPTA (MT in VPL) (493 Points)
Replied 21 October 2009

1. what is the meaning of annual charge and it's tax treatment?

2. tax treatment when house is owned by co-owners and their share are not definite?

3. benefit of S.O.house wil be available if house is used in residence of relatives of the assesse ?

4. IS tenant liable to deduct TDS on rent, if yes, then when and what is the rate of tds?

Amit Ingale (Student CA Final) (1454 Points)
Replied 21 October 2009

Originally posted by :ravi gupta
"	1. what is the meaning of annual charge and it's tax treatment? 2. tax treatment when house is owned by co-owners and their share are not definite? 3. benefit of S.O.house wil be available if house is used in residence of relatives of the assesse ? 4. IS tenant liable to deduct TDS on rent, if yes, then when and what is the rate of tds?	"

check where you are,before posting any messge. dont jus be blind on calcbindia.com posting

vikas tiwari (c.s final) (28 Points)
Replied 22 October 2009

in short we say share is the part of capital which may partly or fully paid up

where as stock is the part of share which always be fully paid up

(Guest)

Answer given by Mohit Mahajan is related to stock exchanges. However as per Companies Act-A share in a company in one of the units into which the capital is divided. On the other hand, a stock is an aggregate of fully paid shares of a member merged into one fund of equal value.This fund can be divided into fractions of any amount and can be transferred. Only a company limited by shares may, if authorised by authorised by Articles by resolution passed in general meeting, convert all or any of its fully paid up shares into stock. For reference read sec 94.

Also a share can be transferred only in its entirely or in its multiple only. However a stock may be transferred in any fraction.....

Shares are issued originally by the co. However a co cannot make an original issue of stock. Only fully paid shares can be converted into stock

1 Like

A.K.Banik (Tax Consultant) (1596 Points)
Replied 22 October 2009

POONAM HAS RIGHTLY EXPLAINED THE MATTER , THANKS POONAM.4 UR FEEDBACK 2 CA CLUBINDIA.

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

Originally posted by :Akash
"	POONAM HAS RIGHTLY EXPLAINED THE MATTER , THANKS POONAM.4 UR FEEDBACK 2 CA CLUBINDIA.	"

Thanks.......

Amit Ingale (Student CA Final) (1454 Points)
Replied 22 October 2009

Originally posted by :Poonam Thanvi
"	Answer given by Mohit Mahajan is related to stock exchanges. However as per Companies Act-A share in a company in one of the units into which the capital is divided. On the other hand, a stock is an aggregate of fully paid shares of a member merged into one fund of equal value.This fund can be divided into fractions of any amount and can be transferred. Only a company limited by shares may, if authorised by authorised by Articles by resolution passed in general meeting, convert all or any of its fully paid up shares into stock. For reference read sec 94. Also a share can be transferred only in its entirely or in its multiple only. However a stock may be transferred in any fraction..... Shares are issued originally by the co. However a co cannot make an original issue of stock. Only fully paid shares can be converted into stock	"

Thank you very much for your reply.

Now suppose

how one differtiate the "fully paid share" and stock ? is it that come shares come into existance and then only it can become stock.

Is it True :- one cannot buy fraction shares which are partly paid ?

and is this twp terms are specifically defined in companies ACT, 1596.

(Guest)

Yes these terms are specifically defined in the act. First the shares are issued and then the co after passing resolution in general meeting if authorised by its articles can convert the shares held by members into stock. The shares have to be fully paid in order to get converted into stock. This stock can be transferred in any fraction. However the shares can only be transferred in a definite way 'like you cannot tranfer 0.5 share'.