Stock Market Companies are either Corporations or Joint Stock Companies that get enlisted on the Stock Markets to raise capital through issuing and circulating shares or stocks, mainly in order to finance expansion programs.
Joint Stock Companies are financed ,that is, they earn their capital through the contributions of several shareholders (all of whom are minuscule owners of the company thus formed) who buy the stocks issued by these Stock Market Companies. In return, the shareholders receive Certificates of Ownership or Stocks which they may transfer at will.
In the context of Stock Market Companies, Corporations basically refers to the Modern Business Corporations that have a legal identity that is distinguished from its owners, workers, bondholders, shareholders and is characterized by :
transferable shares
constant lifespan
limited liability
Most Stock Market Companies begin their journeys as Joint Stock Companies which later get incorporated to ease the business processes to form Corporations or rather Modern Business Corporations.
Stocks or Shares are kinds of securities that support and legally prove the shareholders' claim on the Stock Market Companies' assets and earnings.
The two main types of stocks available in the Share Market are:
Common Stock - these entitle the shareholders to ownership interests or dividends as well as voting rights.
Preferred Stocks - shareholders owning these stocks enjoy a priority during distribution of dividends and assets over those who own Common Stocks. These shares are usually without voting rights.
Two other kinds of Stocks that need to be mentioned here are :
Dual Class Stock - shares issued for a single company but with different rates of dividends and voting rights.
Treasury Stock - bought back from the shareholders, these stocks however are not considered as outstanding but rather as issued stocks.