Stock/share/equity is a proportionate ownership in the issuing corporation. This entitles the stockholders to that proportion of the corporation's assets and earnings.
In the long run, they have outperformed most other investments.
Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. Stock holders don't own the corporation, they own shares issued by corporations. Corporations are a special type of organization because the law treats them as legal persons. Coroprations file taxes, can borrow, own property, be sued, etc. The idea that a corporation is a “person” means that the corporation owns its own assets.
This distinction is important because corporate property is legally separated from the property of shareholders, which limits the liability of both the corporation and the shareholder.
If you own 33% of the shares of a company, it is incorrect to assert that you own one-third of that company; you own 100% of one-third of the company’s shares. A shareholder can’t walk out with a chair because the corporation owns that chair, not the shareholder. This is known as the “separation of ownership and control.”
Owning stock gives you the right to vote in shareholder meetings, receive dividends (which are the company’s profits) if and when they are distributed, and it gives you the right to sell your shares to somebody else.
Many stocks, however, do not pay out dividends, and instead reinvest profits back into growing the company. These retained earnings, however, are still reflected in the value of a stock.
Common stock entitles the owner to vote at shareholders' meetings and to receive any dividends paid out by the corporation. Preferred stockholders generally don't have voting rights, but they have a higher claim on assets and earnings than the common stockholders.
Companies can issue new shares whenever there's a need to raise additional cash. This dilutes the ownership and rights of existing shareholders.
Stocks are issued by companies to raise capital, paid-up or share, to grow the business or to undertake new projects.
You can buy shares directly from the company when it issues them, primary market, or from another shareholder, secondary market.