Definition of stocks

Stocks are a security that represents a percentage of the private capital in a company. The value of shares may increase or decrease depending on the

 

Definition of stocks

Stocks  are a security that represents a percentage of the private capital in a company. The value of stocks may increase or decrease depending on their spread in the financial market,  and stocks are defined as the amount of money that is part of the ownership of a company, and it is possible Put it up for purchase by the public.  Another definition of stocks is the amount of the capital of an existing or joint stock company. These stocks are used among the financial transactions that depend on their circulation among a group of individuals. 

Stock properties

Stocks are characterized by a set of characteristics, the most important of which are:

• Equal value: It is the achievement of integration between all the values ​​of the stocks belonging to the company , which together constitute the full value of its capital, and upper and lower limits for the nominal value of stocks have been set based on commercial laws. Regulating stock prices on the stock market (stock exchange); Therefore, stocks cannot be issued without determining their value. Equal value of stocks is an achievement of equality in the rights granted to stockholders, and the nature of these rights varies with the different types of shares. 

• The balance of the responsibility of the partners: It is to achieve fairness 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: 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 the companies; Therefore, the heirs must choose one person to represent the value of their shares in the company, and the inability to split the shares contributes to the ease of achieving rights and the application of mutual duties between companies and shareholders. 

• The possibility of trading shares: It is one of the special characteristics and advantages of shares. It is rare for a stock to remain with its first owner for a long period of time, but shares are traded between more than one shareholder during the buying and selling operations in the financial markets.

Types of stocks

The types of shares differ according to the principles adopted in their classification, and the following is information about the most important types of shares:

• Cash stocks: They are the main shares that constitute a monetary value from the capital of companies, as well as accept trading in the financial market. Because money is the unit of calculation and measurement of corporate capital values . 

• In-kind shares: They are the shares that some shareholders provide to the companies, but on the condition that their value is equal to the monetary value of the shares, and that it is equal to the share value or its multiples, which helps ease 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 its ownership are permanently recorded.

•  Bearer shares: They are shares whose owner is not necessary to mention the name of their owner, rather it is sufficient to have evidence of their ownership in order to contribute to proving their returns to their owner.

•  Promissory notes: These are shares that depend on the name of their subscriber, and they are traded based on the presence of a sign from their owner with a signature from him indicating that he has abandoned their ownership, and this sign is called endorsement, and there is no need to restrict this process in the company records . 

• Ordinary shares: They are the shares that are issued with equal values ​​together, and are considered the principal shares issued by joint stock companies. 

• Preferred shares: They are a distinct type of stock that provides its owner with a set of advantages that distinguish it from ordinary shares, including the guarantee of 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 distribution of profits, or upon liquidation of the company. 

• Capital shares: They are the shares that remain in existence with the continued existence of the company , and shareholders do not get their value except in the event of the company being liquidated, and this is the original nature of the shares of joint-stock companies.

•  Enjoyment shares: They are shares issued by companies in order to overcome financial problems or to obtain additional financial financing, and their value can be recovered during the period of the company's existence, with the owner of the company being linked on the condition that he does not sever his link with the company.

Ruling on trading in stocks

Trading in private stocks 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, there are three types: 

• Permissible companies: They are companies whose work depends on permissible investments in many economic fields, such as trade , agriculture , and industry , and does not apply any forbidden transactions. It does not deal in usury loans, nor does it get financial benefits; Through dealing with usurious banks, and these companies may deal with them and invest in their shares. 

• Forbidden companies: are companies that operate within areas of business that are forbidden by law, such as companies selling alcoholic beverages, and this type of companies is forbidden by the jurists to deal with them and contribute to their capital, or invest in their shares in terms of sale or purchase. 

• Mixed companies: are companies that offer works of permissible origin, such as commercial and industrial businesses, but some of their activities are associated with forbidden actions, such as obtaining loans and interest. The fuqaha 'differed in judging it, and the following is an explanation:

1- It is prohibited to participate in these companies if they deal in usury legally within their main system. Because its shares are securities that can be traded between shareholders, and each share represents a financial share in the capital of the company, so if its capital contains unlawful money, then the shareholder in its shares is considered a participant in this forbidden. 

2- It is not prohibited to trade in the shares of these companies if they engage in interest. Due to the negligence or misdeed of its manager or one of its employees, or in the event of legal regulations that require them to deal with interest-based banks, but a financial charity must be given out of the value of their profits equal to the value of usury money.