What Are Equity Shares?
Equity shares represent ownership in a company. When you purchase equity shares, you become a shareholder and part-owner of the business. This ownership comes with certain rights and potential rewards, but also carries risks.
In Ghana's equity crowdfunding market, equity shares allow individual investors to own portions of growing businesses, from startups to established companies looking to expand.
How You Earn Returns
Capital Appreciation
If the company grows and becomes more valuable, your shares increase in value. You can sell them for more than you paid.
Dividends
Companies may distribute profits to shareholders as dividends, typically paid quarterly or annually.
Example Return Calculation
If you invest GHS 1,000 for 10% equity and the company value grows from GHS 10,000 to GHS 20,000, your shares are now worth GHS 2,000 - a 100% return on investment.
Your Rights as a Shareholder
Voting Rights
Vote on major company decisions and board elections
Information Rights
Access to annual reports and financial statements
Dividend Rights
Share in profits when dividends are declared
Liquidation Rights
Share in company assets if the business is sold or closed
Risks to Consider
Company Performance Risk
If the company performs poorly, your shares may lose value or become worthless.
Liquidity Risk
Equity shares in private companies can be difficult to sell quickly.
Dilution Risk
Your ownership percentage may decrease if the company issues new shares.