What is a Stock and What are its Types?
Stocks are valuable papers given to the shareholders of capital companies to document their capital shares. Not all capital companies have the authority to issue stocks. Capital companies that have received permission from the CMB can issue stocks. Institutions and organizations authorized to issue stocks include Joint Stock Companies, Limited Partnerships whose capital is divided into shares, and institutions established by special law. Institutions established by special law include the Central Bank of the Republic of Turkey, State-Owned Enterprises, insurance companies, and affiliated institutions.
Bearer and Registered Stocks
If a name is specified on the valuable paper, it is a registered stock. If no name is written, it is a bearer stock, which grants the right to receive benefits to the person holding it. The transfer of rights on any valuable paper to another person is called endorsement.
Common and Preferred Stocks: Stocks that grant more special rights to shareholders than others, as specified in the articles of association, are called preferred stocks, while stocks that grant equal rights to their holders are called common stocks.
Stocks with Premium and Without Premium: The written value on the stock is called the nominal value. If the amount on the stock is higher than the written figure, it is a stock with a premium; if the written value is extracted, it is a stock without a premium.
Stocks with and Without Consideration: Stocks issued during the establishment or capital increase of companies are stocks with consideration. These stocks allow for fundraising from individuals and organizations other than capital owners. Stocks without consideration can be received by shareholders.
Founders' and Usufruct Stocks: Founders' stocks are issued to those who contributed to the establishment and do not grant the right to participate in partnership and company management. They grant the right to a share of the company's profits. Usufruct stocks, on the other hand, are issued to certain individuals in return for their receivables or services and do not grant partnership rights. Investors and organizations who choose stocks as an investment tool must fulfill certain responsibilities in addition to making profits. Dividend right: When the business makes a profit, shareholders become partners in this profit according to their share. Preemptive right: This is the right of existing shareholders to be the first to purchase shares in a capital increase when companies decide to increase their capital with consideration. Of course, to benefit from this right, the old stock must be submitted within the period specified by the CMB.
