Definition
1. Corporate/Securities Law. A unit of ownership interest in a corporation or joint-stock company, representing a proportional claim on the company's assets, earnings, and voting rights. A share is both a chose in action and a form of personal property, typically evidenced by a stock certificate (in certificated form) or recorded in the company's books (in uncertificated form). The holder of a share — a shareholder or stockholder — acquires defined rights against the corporation but, as a general rule, no direct interest in specific corporate property.
2. Property/Succession Law. A fractional part or portion of an estate, trust, fund, or jointly held property. When a decedent's estate passes under intestacy or by will, beneficiaries receive "shares" representing their proportional entitlement. Similarly, co-tenants, partners, or members of a class hold shares of a common fund or asset.
3. General Legal Usage. Any proportional part of a whole in which two or more persons hold an interest — appearing in contexts ranging from partnership accounts to cost-sharing arrangements to apportioned liability.
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Common Language
Modern common usage (Wiktionary): A portion belonging to, due to, or contributed by an individual; also, one of the equal parts into which a company's capital is divided, entitling the holder to a proportion of profits.
Historical common usage (Webster's 1913): "A part or portion belonging to or contributed by an individual"; also specifically, "one of the equal fractional parts into which the capital stock of a joint-stock company or a corporation is divided."
By the late nineteenth century, the corporate-securities meaning of "share" had become sufficiently technical that it required precise legal treatment. The common usage captures the intuition of a proportional part, but it misses the key legal incidents: the share as a species of intangible personal property, the bundle of rights (economic, voting, informational) attached to it by statute and charter, and the critical distinction between the share itself and the physical certificate that may evidence it. A researcher treating "share" as simply a "piece of something" will miss the legal infrastructure that governs its creation, transfer, and extinction.
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Common Confusion
Share vs. Stock. In American usage, "stock" and "shares" are often used interchangeably, but they are not identical. "Stock" refers to the aggregate capital interest of a class (e.g., common stock, preferred stock), while "share" is the individual unit into which that stock is divided. A shareholder owns a specific number of shares; collectively, those shares constitute stock. Rapalje & Lawrence treats "stock" as the aggregate and "share" as the unit — a distinction that matters when reading older statutes, charters, or trust instruments that speak of one but not the other.
Share vs. Share Certificate. A share is the ownership interest itself; a share certificate is the document evidencing that interest. The certificate is not the share. This distinction is critical in transfer, pledging, and insolvency contexts, where courts have had to determine whether delivery of the certificate passes the underlying interest.
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Core Elements
For a valid share in the corporate sense, the following are generally required:
Authorization. The corporation's charter (articles of incorporation) must authorize a class and number of shares. Shares issued beyond authorized limits are void.
Issuance. Shares must be formally issued by the corporation in exchange for consideration — money, property, or services — meeting statutory minimum requirements. The consideration problem is the source of watered stock doctrine.
Valid Consideration. Historically, par value set a floor on permissible consideration; modern statutes in most jurisdictions have moved to no-par or board-determined value, but the requirement that consideration be legally sufficient remains. See Corporate Finance — Consideration for Shares and Watered Stock.
Registration or Recording. In modern practice, shares are reflected in the corporation's stock ledger or registered with a transfer agent. Certificated shares require a signed certificate; uncertificated shares are evidenced by a registered entry.
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Recognized Forms
/SUBTYPES
Common Shares (Common Stock). The residual ownership class, carrying voting rights and a claim on assets and earnings after prior claims are satisfied.
Preferred Shares (Preferred Stock). Carry preferential rights — typically in dividends and on liquidation — over common shares, often at the cost of reduced or absent voting rights. May be cumulative, participating, convertible, or redeemable depending on charter terms.
Treasury Shares. Shares previously issued and outstanding that have been repurchased by the issuing corporation. They are issued but no longer outstanding and carry no voting rights or dividend entitlement while held by the corporation.
Fractional Shares. A portion of a whole share, arising from stock splits, dividend reinvestment, or merger consideration. Their transferability and voting rights vary by jurisdiction and corporate charter.
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Why It Matters in Research
The term "share" is a chameleon across the Law Mind corpus, and conflating its uses across contexts will produce errors.
In corporate law sources, the operative questions are authorization, issuance, class rights, and transferability. Pre-twentieth-century materials will often use "share" and "stock" interchangeably and will assume par value systems that no longer govern in most U.S. jurisdictions. Researchers reading older charters, corporate histories, or equity cases must mentally translate par-value-based share concepts into modern no-par frameworks.
In succession and property contexts, "share" means a fractional entitlement to a fund or estate and has nothing to do with securities law. Intestacy statutes speak of shares — a surviving spouse's share, a child's share — and these govern by entirely different rules. The Income Shares Model in child support law (see Family Law Encyclopedia) uses the term in yet another sense: a proportional allocation of combined parental income to calculate support obligations.
In tax law, cost-sharing arrangements use "share" to describe allocated portions of R&D or other expenses among related entities, governed by specialized Treasury regulations that have no relationship to corporate share ownership.
Historical sources, including Rapalje & Lawrence, focus primarily on the joint-stock and corporate meaning because that was the commercially significant usage in the late nineteenth century. They largely omit the income-shares and tax-sharing senses, which are twentieth- and twenty-first-century developments. Researchers working on pre-1900 materials will find Rapalje & Lawrence useful; those working in modern corporate finance, family law, or tax will need to supplement heavily.
Watch for the term "beneficial share" or "equitable share" in trust and equity materials — these indicate an equitable ownership interest in shares held by a trustee, adding a layer of complexity that purely legal-ownership definitions do not address.
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Historical Dictionary Support
Rapalje & Lawrence defines a share in the corporate context as "one of the equal parts into which the capital stock of a joint-stock company or corporation is divided," and as personal property transferable in the manner provided by law or the company's regulations. The definition reflects the dominant nineteenth-century understanding: the share as a fractional unit of a larger aggregate (the stock), held as personalty, and subject to the company's own transfer rules rather than the general law of property transfer.
Rapalje & Lawrence is useful for its clarity on the personal-property characterization at a time when courts were still working out whether shares were more analogous to real property interests in the underlying corporate assets. It correctly identifies the share as distinct from both the certificate and the underlying property, though it does not develop the modern concept of uncertificated shares, which postdates the source entirely.
The source does not address preferred stock in any developed way, reflecting the relatively limited use of preferred share structures in American practice before the late nineteenth century. Researchers studying the evolution of preferred share rights — including cumulative dividend claims and liquidation preferences — will find Rapalje & Lawrence a starting point at best and must consult later materials for doctrine that developed primarily in Delaware and New York courts through the twentieth century.
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Jurisdictional Note
Delaware corporate law is the dominant reference point for share-related doctrine in American practice, given the prevalence of Delaware incorporation. The Delaware General Corporation Law governs authorization, issuance, and the rights of shares in ways that have been widely adopted but not universally copied. Researchers should not assume that rules from Delaware cases or statutes govern shares issued by corporations chartered elsewhere. In the United Kingdom and Commonwealth jurisdictions, "share" is the standard term where American practice might use "stock," and the governing framework differs substantially in areas such as capital maintenance and share buyback rules.
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Encyclopedia Cross-Reference
Corporate Finance — Consideration for Shares and Watered Stock (The Law Mind Business Organizations & Corporate Law Encyclopedia)
Child Support — Income Shares Model (The Law Mind Family Law Encyclopedia)
Exclusions — Certain Cost-Sharing Payments (The Law Mind Tax Encyclopedia)
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