Shares are units of ownership in a company, also known as stocks or equities. When an individual buys shares in a company, they become one of its owners. Companies divide their stock into shares, which are sold to investors, generally investment banks or brokers that, in turn, sell the shares to other investors individually or through instruments like a mutual fund or exchange-traded fund. The terms "shares" and "stocks" are often used interchangeably, but they represent a company differently. While shares represent ownership, not debt, there is no legal obligation for the company to reimburse the shareholders if something happens to the business. However, some companies may distribute profits to shareholders through dividends.

The number of shares determines how big of a piece of ownership in a business an individual has. If a company has 100,000 outstanding shares of stock and an individual owns 1,000, they have a 1% equity ownership stake in the companys business. The value of a share of stock depends on several factors, such as the sales, growth, or profitability of the underlying business, as well as overall market factors such as the health of the economy, interest rate conditions, and more.

Founders, partners, or specific employees like executives generally own shares of privately held companies or partnerships. When establishing a corporation, owners may choose to issue stock to raise capital. Companies boards of directors are given a specific number of shares that can be issued, called authorized shares. Issued shares are the number of shares sold to shareholders and counted for ownership purposes.

In conclusion, shares are units of ownership in a company that represent a claim of its assets and earnings. They are a popular investment option for individuals looking to grow their wealth long-term.