Answer:
Dividends
Step-by-step explanation:
A company makes earnings or a profit.
The main difference between a company and a proprietorship is while the company has capital owned by several people with each person having his capital as shares he holds. But sole proprietor is the sole owner of the business and entire profit or loss will go to the single person.
But a company's capital comprises of many shares owned by different classes ,types of people. Hence company's profit after taxes will have to be shared with those shareholders.
After profits are arrived then tax is paid the available profit after tax will be reserved for some capital expenses and the remaining will be distributed to the shareholders.
This amount will be a certain percent of shares and is called dividends of shares.
Dividends will be normally paid annually.
