Stock
A share of ownership in a company.
Stock represents an ownership share in a corporation. Stockholders are entitled to a proportional share of profits (through dividends) and voting rights on corporate matters. Stock can be publicly traded on exchanges or privately held. For small business owners, stock may be issued to co-founders, employees (stock options), or investors as a way to share ownership and incentivize performance.
Example
A startup issues 1,000,000 shares—the founder retains 600,000 shares (60% ownership), investors receive 300,000 shares (30%), and 100,000 shares are reserved for an employee stock option pool.
Why It Matters for Your Business
Understanding stock and equity structures is essential for raising capital, compensating key employees, and planning ownership transitions or exits.
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