Shares of Share Companies
Concept of a Share
Actually, there is no fixed concept of a share and its nature is not yet determined for the notion of “share” may be understood in different senses.
Firstly, a share may be grasped as a chose- in- action. Chose -in -action is a property that one does not actually perceive, as it has no physical existence but a right that can be enforced by legal action. However, defining the term," share" as a chose-in-action does not always help us draw a clear picture of the concept for the expression “chose-in-action” itself is a vague concept consisting of bundles of rights evidenced by documents.
Secondly, a share may be understood as part of the share capital of the company. This may be evident from Art.304 of the Comm. Code which defines share company on the basis of concept of share stating that share company is a company "whose capital is fixed in advance and divided into shares…." This concept of a share is defective in that a share is not merely a sum of money but an interest measured in sum of money and made up of bundles of rights. It represents an equity or ownership interest in the company. By their nature, shares are indivisible.