Types of Shares

Stock is the shares in which ownership of an organization is divided into a number of owners. In common usage, the commonly used terms are “stock” and “dividend stock”. A single share of stock represents single fractional ownership of an organization in relation to the total number of outstanding shares. The dividends are paid by the company to its stock holders.


A common stock is one that can be bought or sold only by the company itself, or by authorized members or shareholders. Some publicly traded companies issue common stock without restricting the issue to any specific category of people. Common stock in the United States consists of different types of corporate securities such as common stock, preferred stock, debt stock, debentures, promissory notes and common stock dividends. In Canada, there are also different types of common stock. One of these is Canadian common stock.

Most publicly traded companies have on their exchanges (TSX or TMX) stocks listed on the Toronto stock exchange (TSX). The Toronto stock exchange is the largest stock exchange in Canada. Some Canadian companies offer stocks through a “national” platform, which allow traders in various countries to trade with the same information. Some other Canadian companies, however, operate on their own proprietary exchanges. In this case, shares may be exchanged between investors on their own country’s stock exchange.

An investor can buy shares of stock from a company on the stock exchange listing either for a set amount (a primary offering) or based on the performance of the business. In order to sell the shares, an investor may require approval from the Company or the TSX. The approval can either be in the form of an application from the company or from the shareholders. Depending on the type of stock issued, an investor may also need to provide quarterly or annual payments. Investors who need to obtain approval of a tender offer usually do not require stockholder or management approval.

Canadian equity and preferred stock are types of preferred shares, which are also traded on the Toronto stock exchange. Preferred shares are stock that can only be owned by a select group of insiders. These shares offer higher dividends than other forms of common stock and are traded on the TSX. Generally preferred shares are owned by institutional investors.

Lastly, common stock is also divided into two categories: common equity and preferred stock. Common equity is owned by the Canadian company itself and common stockholders will have no say in the management of such companies. On the other hand, preferred stock is often owned by the individual investors. This type is traded more actively and it gives more power to the investors.