Kanwal Commerce Academy

Issue of Shares means a company raises money by selling its shares to investors. In return, shareholders become part owners of the company and may receive dividends if the company earns profits.

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Types of Shares Explained

Shares represent ownership in a company. The two main types are Ordinary (Common) Shares, which usually give voting rights and variable dividends, and Preference Shares, which offer fixed dividends and priority over ordinary shareholders during dividend payments and liquidation. Understanding these types helps investors make informed financial decisions.

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Public Issue vs Private Placement

A Public Issue is when a company offers its shares to the general public through the stock market to raise capital.
A Private Placement is when a company sells its shares directly to a selected group of investors without offering them to the public.

Key Difference:
📈 Public Issue = Open to everyone
🤝 Private Placement = Offered to selected investors only

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Steps in the Issue of Shares Process
The issue of shares follows a simple sequence: Prospectus → Application → Allotment → Share Calls → Share Certificate. Understanding these steps helps students learn how companies raise capital and how shareholders become legal owners.

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