A financial security/ instrument that constitutes an ownership share in an entity (business, non-business; corporation, partnership, trust, etc). More specifically, the holder of an equity security has ownership claims on (residual interest in) an entity’s net assets. It also gives the holder the right to a “respective” proportion of the earnings of the entity.

The common types of equity securities include any stock (common stock) or similar security, or any security convertible, with or without consideration, into such a security. This also includes any similar security carrying any warrant or right to subscribe to or purchase such a security.