Finance glossary
Shares
Also known as: Share, Equity shares
In simple terms
A share is one unit of ownership in a company. If you own shares, you own a small part of that company and share in its profits and its ups and downs.
On this page
What does shares mean?
A share is a single unit of a company’s ownership. Own one and you are a shareholder — entitled to a slice of the company, often a vote at its meetings, and any dividends it decides to pay.
People sometimes ask about “stocks vs shares”. The two are used almost interchangeably, but strictly a “share” is one individual unit, while “stock” is the broader term for ownership capital in general — so you might hold shares in several companies as part of your overall stock holdings.
How shares work
You buy and sell shares through an investment platform or broker, and their price moves with demand and the company’s prospects. You can make money two ways: from the share price rising (a capital gain) and from dividends.
There is no guarantee of either. A share price can fall, dividends can be cut, and if a company goes bust its shares can become worthless — shareholders are usually last in line to be paid. You could get back less than you invested, or nothing.
How could this affect me?
Shares give you direct exposure to individual companies, with the chance of strong returns but real risk of loss. Holding just a handful of companies is far riskier than spreading your money widely.
For most people, buying a fund that holds many shares is a simpler way to invest in the stock market than picking individual shares. Either way, shares suit money you can leave invested for the long term.
Things to watch out for
- A share price can fall, and shares can become worthless if a company fails.
- Owning only a few companies’ shares concentrates your risk heavily.
- Dividends are not guaranteed and can be cut or stopped at any time.
- Past performance is not a guide to future returns.
Know your rights
- A firm selling or holding shares for UK retail investors must be authorised by the FCA, and its promotions must be clear, fair and not misleading.
- If an authorised UK investment firm fails, FSCS may protect eligible investments up to £85,000 — this covers the firm failing, not losses from the shares falling in value.
- If you are badly advised or treated unfairly, you can complain and escalate to the Financial Ombudsman Service.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, How to invest — shares explained (opens in a new tab). Accessed 22 Aug 2026.
- FCA, Investing basics (opens in a new tab). Accessed 22 Aug 2026.