Equity Securities

Equity signifies the capital pumped into a company by an investor or the one who funds, who takes the entire risk involved in the company’s industrial processing in return for the share in the company’s profits.

 
If the company is organised under a very limited liability structure, the equity or the shares is divided into shares. The risk borne by the shareholders is limited to the amount they contribute to the functioning of the enterprise in amount of the shares held by each of them.

Shareholders’ equity or shares is a source of financing or a way of raising money for the enterprise, but the related financial security, the share,  guarantees the investor neither a fixed amount of income nor any repayment. The shareholders can ‘‘cash in’’ their investment only by selling it to the potential buyer . The investor obtains certain corporate rights, however: a claim on the company’s earnings and – along with his voting rights – management oversight.

CEO or the chief executive officer is the head of the board of directors or the people who holds the shares in the organisation of the company a decision about choosing the CEO is reached by the joint agreement of the board of directors.

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