Share Issuance

• A corporation issue shares in its capital stock in exchange for capital and other economic resources to be invested in the business. For example, a man who signed over possession of a vehicle to the corporation can be compensated in shares of that corporation's stock. Most corporations will also issue shares available to the public at some time in order to raise additional capital for their operations. A corporation doing this for the first time is making what is called an initial public offering, or IPO, and might be doing so in order to raise enough capital to expand operations. In all cases, the corporation can be considered the seller of the shares in question and will receive the proceeds from their sale.
  
  

Common and Preferred Shares

• Not all stock shares accord their shareholders the same rights and responsibilities. Different corporations issue different share classes for different purposes, but most stock shares can be divided into either common shares or preferred shares. Common stock shares are shares in the issuing corporation's ownership and accord their shareholders the right to vote on important company policies and to elect its board of directors. Preferred shares more closely resemble debt instrument. Preferred shareholders have no say in how the company is run but are entitled to collect dividends in each and every year.
  
  

Selling Shares on the Open Market

• Most people are thinking of shares being sold on the stock market between different investors when they think of selling shares. In these cases, the stock market works to set up sellers who want to sell at a certain price with buyers who want to buy shares at that same price. When this happens, it's the original shareholder who receives the money when the share is sold. A shareholder may choose to sell because his stock has made a profit on paper, and he wants the cash. He might also sell because the stock is falling, and he wants to cut his losses.
  
  

Share Buyback

• Sometimes a corporation will choose to buy back issued shares from shareholders because it wishes to raise its stock value or for some other purpose. These situations are called stock repurchases or stock buybacks. Should the shareholder agree to the offer made by the corporation, she is, in effect, agreeing to sell the share to the corporation and is therefore the one who receives the proceeds from selling the share.