Financial securities: shares and stock

 Joeun achim (좋은 아침) palm tree! Nín hǎo (您好) olive tree! May this week be particularly pleasant for you. May you have new ideas. May the LORD surprise you. May you have wonderful encounters. May you discover new and good opportunities. May the favor of GOD and that of men be with you. May patience and kindness spare you from unnecessary struggles. May peace reign within your walls, and tranquility within your palaces! (Psalms 122:7)

“Cut the grass in the fields and, while the new grass grows, gather hay on the mountains. Have sheep to make clothes for yourself, and goats to buy a field. Use the milk your goats give in abundance to feed yourself, your family, and your servants.” (Proverbs 27:25-27, Fluent french translation)

Initially, the subject of this article was investing in unlisted securities. Along the way, I realized it would be better to start with specific articles on securities and then continue with the topic of investing (opportunities, methods, risks, and advice). The goal is to give everyone a solid foundation and a clear understanding of the terms. Our countries, ages, and contexts are different. What is known to some may not be known to others.

Financial securities or transferable securities are ownership rights over part of the capital of a company, or over part of the debt of a company or a State. They can take several forms: shares, bonds, debt securities or UCIs (Collective Investment Funds) containing themselves shares, bonds or debt securities. Financial securities can be held by a legal or natural person. They can be issued by a company or a state. These are financial assets. Financial securities can be listed on the stock exchange, or unlisted.

A share is a title to ownership of part of the capital of a company. The holder of a share is called a shareholder. All shareholders together constitute the company's shareholding structure. General meetings are open to all shareholders. This is not the case for board meetings. The board of directors is a group of people who represent the interests of the shareholders of a company, association, or organization. It is most often composed of the major shareholders and the company's chief executives. It guides strategy, management, and investments.

Shareholders have the right to:

• Be informed of the results and the general activity of the company.

• Participate in general meetings (with or without the possibility of voting depending on the type of share or percentage of shares held).

• Receive dividends (portion of the profits) if the company decides to distribute them (if it makes profits).

In return for these advantages, shareholders accept the risk of losing all or part of their investment in the event of the company's bankruptcy or a fall in the share price. Like any financial security, shares may be listed on a stock exchange or unlisted.

If I were the finance minister of a country, particularly an underdeveloped country, I would require the government to hold at least a 5% to 10% shares in the country's 500 largest companies.

Listed shares are traded on the stock exchange. The price is set by supply and demand. Unlisted shares are traded over the counter between investors. The price is set by them (direct negotiation). These shares are less liquid than listed shares. This means that they sell less quickly and the price is often not known in advance. Unlisted shares are held in registered form.

Shares can be held “in bearer form” or “in registered form”:

• Shares held in bearer form (listed shares): held in the holder's portfolio, but the company of which he is a shareholder does not know him. All transactions are carried out through his financial intermediary. This is the most common situation.

  
  

• Registered shares (listed and unlisted shares): the shareholder is listed in the company's legal records. They are directly informed of events concerning the company by the company itself and enjoy specific benefits. Not all listed companies allow registered shares to be held. A minimum number of shares is required to hold registered shares in a listed company. Unlisted shares are held exclusively in registered form.

There are common shares and preferred shares. Common shares are those referred to as shares. Preferred shares grant special privileges. They are only possible in corporations. If preferred shares are not created, all shares are considered common shares. This type of share does not exist in all countries. Regardless of the type of shares, privileges are always granted to majority shareholders.

In French, there are two expressions to designate the shares of a company or an association : action and part sociale. These are titles of ownership of the share capital, differentiated according to the legal form of the company. Both are translated by shares in english. The word action is for capital companies while the expression part sociale is for partnerships companies and civil companies.

Actions and parts sociales are securities that make up a company's capital (sahres). However, not to the same types of companies. Actions are shares issued by joint-stock companies. The most common are corporations, simplified joint stock companies, and limited partnerships with share capital. Parts sociales are shares issued by companies other than joint stock companies. The most common are limited liability companies, general partnerships, limited partnerships, and civil companies.

parts sociales cannot be listed on the stock exchange. The transfer of shares is more strictly regulated than that of others. For example, the company's articles of association may restrict or prohibit the sale of shares to third parties who are not shareholders or who have not been approved by the other shareholders.

** Joeun achim (좋은 아침 ) = Good morning in Korean

** Nín hǎo) (您好) = Good morning in Mandarin (China)