Shares represent ownership in a company and gives the owner (shareholder) rights to:
- Receive dividends if they are paid out to shareholders. Dividends are not mandatorily paid out by companies - this is under the discretion of management.
- Vote on matters put before the shareholders. Voting is apportioned based on the shareholder's percentage ownership in the company.
- Receive the residual economic value of the company should the company fall bankrupt. However, shareholders are last in line behind debtholders and preferred shareholders
Ordinary shares are also referred to as common stock.