Stock Definition
Stocks are a security that represents a percentage of the private capital in a company, and the value of the shares may increase or decrease based on its spread in the financial market. They are offered for purchase by the public. Another definition of shares is the amount of the capital of an existing or joint-stock company, and these shares are used within financial transactions that depend on their trading between a group of individuals.
stock properties
Shares are characterized by a number of characteristics, the most important of which are:
Equal value: It is the achievement of integration between all the values of the shares belonging to the company, which together constitute the full value of its capital, and upper and lower limits have been set for the nominal value of the shares based on commercial laws. regulating share prices in the stock market (the stock exchange); Therefore, shares cannot be issued without specifying their value. Equalizing the value of shares is an achievement of equality in the rights granted to shareholders, and the nature of these rights varies with the different types of shares.
Balance the responsibility of the partners: it is to achieve justice in the distribution of responsibility between the shareholders and the participants in the company based on the value of one share for each of them.
Indivisibility of shares: It is the inability to diversify the owners of a single share; Even if the ownership of the shares is transferred to other people as a result of a will or inheritance, this division of the value of the shares is not acceptable to companies; Therefore, the heirs must choose one person to represent the value of their shares in the company, and the inability to split shares contributes to the ease of achieving rights and the implementation of mutual duties between companies and shareholders.
Possibility of stock trading: It is one of the special characteristics of stocks. It is rare for the stock to remain with its first owner for a long period of time. Rather, shares are traded between more than one shareholder during the buying and selling operations in the financial markets.
Stock types
The types of shares differ according to the bases adopted for their classification, and the following is information about the most important types of shares:
Cash shares: they are the main shares that constitute cash value from the capital of companies, and are also accepted for trading in the financial market; Because money is a unit of account and measurement of the values of corporate capital.
Shares in kind: They are the shares offered by some shareholders to companies, but provided that their value is equal to the cash value of the shares, and that it is equal to the share value or its multiples, which helps to facilitate its calculation.
Nominal Shares: They are the shares on which the name of their owner is recorded, and a serial number for each share is listed in the company's books of accounts, and special changes in their ownership are permanently recorded.
Bearer shares: These are shares for which it is not necessary to mention the name of their owner, but it is sufficient to have evidence of their ownership in order to contribute to proving their returns to their owner.
Promissory shares: They are shares that depend on the name of their subscriber, and are traded based on the presence of a sign from the owner, signed by him, indicating that he has relinquished his ownership, and this sign is called endorsement, and there is no need to record this process in the company’s records.
Ordinary shares: These are the shares that are issued with equal values together, and they are considered the origin of the shares issued by joint stock companies.
Preferred shares: They are a distinct type of shares that provide their owner with a set of advantages that distinguish them from ordinary shares, including guaranteeing the original value of the share in the event of its loss, and the priority for the owners of these shares to obtain their share of the dividend, or upon liquidation of the company.
Capital shares: These are the shares that remain in existence while the company continues, and the shareholders do not obtain their value unless the company is liquidated, and this is the original nature of the shares of joint stock companies.
Enjoyment shares: They are the shares issued by companies with the aim of overcoming financial problems, or to obtain additional financial financing, and it is possible to recover their value during the period of the company’s existence, with the commitment of the owner on the condition that his connection with the company is not severed.
The rule of stock trading
Trading in private shares in companies depends on the extent of its legitimacy in the Islamic religion. Therefore, these companies were distributed according to the opinions of contemporary jurists; In terms of the ruling on investing in its own shares, it can be divided into three types:
Permissible companies: They are companies whose business depends on permissible investments in many economic fields, such as trade, agriculture, and industry, and do not apply any prohibited transactions; It does not deal in usurious loans, and does not get financial interest; Through dealing with usurious banks, it is permissible to deal with these companies and invest in their shares.
Forbidden companies: They are companies that operate within legally prohibited areas of business, such as companies selling alcoholic beverages, and this type of company is forbidden by jurists to deal with them and contribute to their capital, or invest in their shares in terms of buying or selling.
Mixed companies: They are companies that offer businesses of permissible origin, such as commercial and industrial businesses, but some of their activities are associated with prohibited businesses, such as obtaining loans and usurious interests. The jurists differed in ruling on it, and the following is an explanation for that:
It is forbidden to participate in these companies, if they deal in usury legally within their main system; Because its shares are negotiable securities between shareholders, and each of them represents a financial share in the company’s capital. If its capital contains forbidden money, the shareholder in its shares is considered a participant in this forbidden.
It is not prohibited to trade in the shares of these companies if they deal in usury. Because of the negligence or misbehavior of its manager or one of its employees, or in the event that there are legal systems that require them to deal with usurious banks, but a financial charity must be taken out of the value of its profits equivalent to the value of the usury money.