1. Basics- What is a company?

Before we learn how to invest in share market we need to be familiar with some key words and their meaning. The first thing we need to learn about is What is  a Company? To put it simply, a company is any legal business entity that works to earn profit.  A Company can be of classified under various heads but for our understanding we simply classify  it into Private Company and Public Company. The main difference between a public and a private company is that a private company have limited number of owners(Shareholders) while public company can have unlimited number of owners(Shareholders). To identify which is a public and which is a private company we can simply look at their names. Private company will write Pvt.ltd which means Private Limited  after their names while a Public company will just write ltd that means limited after their name.

For Example:  

 

Thus we can clearly identify that Surya Nepal is a private company. 

Likewise,

Nepal Life Insurance Company is a public Company.

The most important thing to understand is that we cannot simply  be an owner of Surya Nepal since it is a private company  but we can be owners of Nepal Life Insurance Company ltd that is a public company.  

We can only invest in a public company which is listed in Nepal Stock Exchange. I will explain what is Nepal Stock Exchange and how we can invest in Public Company in my next blogs. So please follow my blogs for future posts.

Thanks and Regards