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stocks and shares

Differences between Shares and Participations

Stocks and shares In the field of economics, it is very common to talk about actions and participations. For what we must say that both the shares and the shares are securities issued by a company that represents the value of the fractions in which its capital is divided. Thus, both titles are usually subject to different conditions and therefore, talking about shares is not the same as talking about shares.

In this aspect, in this article we will present the differences that exist between both, starting from their brief definitions.



stocks and shares
To begin with, actions are understood as the parts in which the initial capital of a given company is divided, where they serve to obtain capital quickly. Additionally, the shares are securities issued by a company or company that represents the value of one of the equal fractions in which its capital stock is divided. In this way, the owner of an action also called shareholder, has political and economic rights through it that allows him to participate in making decisions and be a participant in the benefits that come from the company.

On the other hand, one of the fundamental characteristics of the shares is that they are transferable without any restriction, that is, either through sale, transfer or assignment. In addition, the shares are an investment of variable income, since their return depends on the proper functioning of the company and let's say that they are the counterpart that the partner receives for the contributions he makes.

Likewise, the shares can have different values, highlighting the nominal value that is the value of the share at the time of the creation of the company, the effective value that is the market value of an action, that is, the price at which buy or sell and the theoretical value that is the price that the action can reach in the market based on the capital and reserves of the company. Finally, the shares are exclusive of the Public Limited Companies.

Participations
Units are understood as the percentage of the total capital of a company owned by an investor. In this way, they are proportional parts of the capital of the company that grant certain rights to their holders but that can not be freely assigned or sold, since they have limitations with respect to their purchase-sale, requiring an authorization from the rest of the owners for this. . The shares are issued by all types of associations, except Public Limited Companies and their value is determined by the internal situation of the company, by the situation of the country in which the company has its headquarters and by factors of the economy.

It should be noted that the shares do not allow their holder the right to vote or decision power over the company. However, these allow an annual remuneration for the shares, which is fixed, regardless of whether the company grows or decreases its power.

As can be seen, the shares and shares share certain similarities but differ depending on certain elements. Therefore, the main differences between actions and

 Participations can be summarized in:

The shares are exclusive of the Public Limited Companies whereas the shares are issued by all types of associations except Public Limited Companies.
The shares are transferable without any restriction while the shares have certain limitations regarding their purchase sale.
The shares are an investment in variable income, since their return depends on the good functioning of the company while the shares are an investment of fixed annual income.

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