shares

Shares are small units of ownership in a company that people can buy, usually through the stock market.

• When a company “offers shares,” it is selling a part of itself to raise capital (money) for things like factories, machines, technology, or expansion.
• A person who buys shares becomes a shareholder—they own a small portion of the business and may benefit if the company does well.
• If the company makes profits, it may share some of that profit with shareholders as a dividend (but dividends are not guaranteed every year).
• Shares can also increase or decrease in value. If the company grows and becomes more successful, the share price may rise; if it performs poorly, the price may fall—so buying shares involves risk.
• Shares vs loans: A bank loan must be repaid with interest, but money raised by selling shares does not have to be repaid like a loan—however, the company is sharing ownership with the public.

This is why shares are mainly used by larger companies: they can collect money from many people at once to build and run big businesses.