What is a stock? How is the stock market formed? A stock is a non-documented investment security that confirms the owner’s proportional participation in the authorised capital of a joint stock company, the right to receive a part of the company's profit in the form of dividends, participation in the management of the joint stock company. and the right to a part of the remaining property after the liquidation of the company in proportion to the share in the authorised capital. According to the law, shares are issued only in the form of purchase and sale.

What types of shares are there?

Shares can be ordinary or preference shares.

• This is a security that entitles the holder of an ordinary share to receive part of the issuer's profits in the form of dividends, to participate in the management of the issuer's activities, and to receive part of the assets remaining after the liquidation of the issuer.
• Preference share is a type of share that guarantees the owner to receive a dividend in the form of a fixed percentage of the nominal value of the share, regardless of the outcome of the issuer’s economic activity and gives a preferential right over other shareholders to receive a part of the issuer’s remaining property after its liquidation, as well as other rights provided for in the Civil Code, the conditions for issuing shares and the issuer’s charter.

What is the nominal value of a share?

The nominal value of a share is a monetary expression of the value of the share determined by the charter of the company. The nominal value of shares is expressed in the national currency of the Republic of Azerbaijan. The issuer has no right to place its shares at a price lower than their nominal value.

Stock market:

The BSE organises the placement of shares and secondary market operations. To authorise trading in shares, these securities must first be registered with the BSE.

According to the law, the offering of shares of public companies (mass offering) is organised through the stock exchange. A mass offering of securities is accompanied by a prospectus. Requirements to the prospectus and its preparation are determined by the supervisory authority.

The secondary market of shares is organised on shares already placed in circulation.

Acquisition of securities on the BSE and participation in the markets organised by the BSE is carried out through members of the stock exchange. For this purpose, one has to approach the desired member of the stock exchange.

Advantages of issuing shares:

• Legal support, change of organisational and legal form (transition from LLC or CJSC to OJSC)
• Formation of organisational structure
• Corporate governance
• Financial responsibility
• Investor search
• Preparation of the emission prospectus and necessary documents
• Listing of securities
• Placement of securities
• Conducting necessary training for the Issuer and related employees.