What is an essential feature of a share regarding its obligations?

A share is fundamentally a unit of ownership in a company and encompasses a bundle of rights and obligations that come with that ownership. When someone purchases a share, they acquire certain rights, such as voting rights in company decisions and the right to receive dividends, provided the company chooses to distribute profits. The obligations may include the responsibility to adhere to company policies and the potential risk of losing the invested capital if the company performs poorly.

This characteristic distinguishes shares from other financial instruments, as they do not guarantee fixed returns or profits and their value can fluctuate based on the company’s performance and market conditions. Instead, they represent potential gains through dividends and capital appreciation, alongside an inherent risk of loss, making the bundle of rights and obligations a core feature of what it means to hold a share.