Identification

• Every company that incorporates has stock, even the S corporations that often incorporate for tax purposes. However, not every corporation sells its stock to the public. Some companies have only privately held stock.
  
  

History

• Publicani, citizens performing services from military service to tax collection in Ancient Rome, contracted out to others. They sold "socci" and "particulae," shares of ownership in the venture. This may have been the first form of stock. The Dutch East India Co. issued the first stock shares in 1606.
  
  

Function

• The issuance of stock is a way for a company to raise capital.
  
  

Types

• There are common stock and preferred stock. The difference between the two is dividends, payoff in bankruptcy and voting rights. Preferred stock has fixed dividends paid before any common stock receives dividends. They receive priority in bankruptcy payments but often don't have voting rights.
  
  

Benefits

• Owners of stock make money from dividends, a share of the company profits, and appreciation, increase in the price of the stock.