Stocks
A stock is defined as a negotiable bond issued by a company to form part of its capital. A stock gives its owner many rights and privileges that guarantee his right to determine his responsibilities, which are determined according to the value of his shares. It must be noted that the stockholder has a share in the company’s profits and losses. In this article, we will introduce you to what stocks are, their types, and the rights of the stockholder.
Types of stocks
Considering the rights it gives to its owners
- Common stock: These shares are equal in value, giving their owners equal rights, and they receive a percentage of Profit is proportional to what is paid to the company without privilege, or increase. Or a decrease, and he bears the loss according to the amount of his shares, and this type of shares is in accordance with the provisions of Islamic law, because it is based on justice.
- Preferred stock: These shares have several advantages that are not available in ordinary shares, in order to attract customers to subscribe to them, and they give their holders the right of priority in obtaining profits. It must be noted that they are not permissible, because they contain usury and therefore they contradict the provisions of Islamic law.
In terms of consumption and value recovery
- Capital shares: These are shares whose value the shareholder is not entitled to recover except in the event of the final liquidation of the company.
- Enjoyment shares: These are shares that are called extinguished shares, meaning that they are consumed and their value is returned to the shareholder gradually, or in one payment.
Considering the paid share
- Cash shares: These are shares that are paid in cash and can be traded as soon as the company is established. They are among the shares that are permissible according to Sharia.
- In-kind shares: These are shares that are not tradable before submitting the balance sheet, losses, and profits for two consecutive years, i.e. each period is not less than 12. One month from the moment of company establishment.
- Mixed stocks: These are shares whose value is paid by the shareholder in cash or in kind, and these shares are considered permissible.
Considering the grant or not
- Non-free shares: These are shares whose owner pays their value, and they are considered permissible according to Sharia.
- Free bonus shares: These are the shares that the company grants to shareholders without compensation in the event that there is a surplus in the company’s money.
Considering the vote
- Voting shares: These are shares that combine voting, management rights, election rights, and ownership rights, and they are permissible according to Sharia.
- Non-voting shares: These are shares that constitute the right to participate in all the company’s profits without their owners having the right to vote, manage, or nominate for membership in the board of directors or to be elected.
Stock Properties
- Equality in Par value of shares: Facilitating the process of distributing profits and losses to shareholders, and determining Majority in the General Assembly.
- Equality of rights granted by the share: Granting the owner the right to vote, and all other obligations arising from share ownership.
- Partners' liability is according to the value of the share: No questions are asked of the company's debts to the shareholder except to the extent of the shares he owns.
- Indivisibility of the share: This means that if several people own several shares, whether through inheritance or purchase, they must Choosing a representative who specializes in exercising rights Stock specialist.
- Tradability of shares: The shareholder has the right to Transfers ownership of his shares to any person who would replace him in the company.
Shareholders' Rights
- Shares give their owner the right to remain in the company, and he may not be stripped of his ownership or expelled.
- The right to vote in the General Assembly.
- The right to follow up and monitor the company’s business from the profit calculation and review the budget.
- The right to control how his shares are disposed of, whether by selling them or giving them away as a gift.
- The right to subscribe to new shares.
- The right to sue the company’s board of directors in the event of negligence in their duties.
- Right get a share of the profits The company.
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