Guide

Shares and shareholders

Introduction

Selling shares in your company is one way of raising long-term finance for your business. This is also known as equity finance. The advantage of equity finance is that you don't always have to repay the finance or pay interest, as you would with an overdraft or bank loan.

Shares in a company represent ownership. When an individual buys shares in a company, they become one of the owners of the business. This entitles them to a share of the distributable profits of the company - the dividends.

This guide will explain how shares are issued and sold, what dividends are and the tax implications associated with dividends.