What is the difference between shares and stocks ?

The main points of difference between shares and stocks are as follows:

(1) A company cannot make an original issue of stocks, only shares when fully paid up can be converted into stocks, while shares can be issued originally direct to the shareholders.

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(2) The shares may be fully paid up or partly paid up but the stocks must always be fully paid up.


(3) The shares are always of a fixed denomination whereas the stocks have no such fixed denomination.

(4) A share has a definite number by which it is distinguished from other shares whereas the stock has no such number

(5) Registration of share capital with the Registrar is compulsory before issuing shares whereas stocks can be issued only after passing an ordinary resolution if Articles permit, and after passing a special resolution in case the Articles do not permit, and filing a notice of conversion with the Registrar,

(6) Stock is divisible into any amount required and as such may be transferred even in fractional amounts whereas a share can be trans­ferred in its entirety or in its multiples only. This difference, however, seldom exists in practice, since the Articles usually prescribe the minimum amount of stock transferable.

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