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The concept elucidated below is based on UK company law...As we all know our law is just anextension of UK law. 

Stock differs, in principle, from shares in the following respects [Morrice v. Aylmer (1874) L.R. 10 Ch.148.] : 

1.stock need not be numbered while shares may have to be numbered; and

 

2.stock need not be divided into equal parts but may be divided into fractions, e.g. assuming thatthe stock arises from shares of £1 each a stockholder may hold £1.60p worth of stock. 

Before the company law reform culminating in the Act of 1948 a considerable number of companiesavailed themselves of this power, and converted their shares into stock in order to obtain the benefitof the first of these characteristics, viz . the absence of numbers. This is convenient in companypractice because it becomes no longer necessary in a transfer to specify all the numbers of thevarious shares comprised in the transfer. A transfer is merely of so much stock. The inducement for the conversion of fully paid shares into stock, however, greatly receded, when the Act of 1948provided that the company could dispense with distinguishing numbers of shares if those shares were

fully paid up and ranked  par i  passu. This provision is now contained in section 182(2) of the Act of 1985. 

By the articles the directors may be authorised to fix a minimum amount of stock transferable, e.g. assuming that the stock arises from shares of a nominal amount of £1 the directors may fix theminimum of transferable stock at whatever figure they choose, whether £1 or less; these units areknown as stock  uni ts.(FN1) The articles should state that where a company creates stock units, their amount must not exceed that of the nominal amount of the share since this would in fact amount to aconsolidation of the shares without the approval of the company in general meeting as required bysection 121(2)(b). 

Under section 121 stock can be reconverted into shares in the same way. Stock cannot be issueddirect by the company. But where a company properly converted its preference and ordinary sharesinto preference and ordinary stock, additional stock issued directly in return for cash was held to bevalid, the "irregularity" of omitting the intermediate formality of issuing the shares and then converting

them being treated as waived by lapse of time. But direct issues of bonus stock and partly paid stockwere held to be entirely void, the holders having no rights, and calls could not be made on them. Noagreement to take notionally converted shares could be implied. [Re Home and Foreign Investment,etc., Co. [1912] 1 Ch. 72.] 

 A company is empowered by the Act to issue stock warrants to bearer [Pilkington v. United Rys., etc.[1930] 2 Ch. 108.] but under the Exchange Control Act 1947 that power was subject to Treasuryconsent and therefore little used. All restrictions of this nature were lifted, apart from what was then

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Southern Rhodesia, with effect from October 24, 1979 and for all purposes with effect from December 13, 1979 [Exchange Control (General Exemption) Order 1979 (S.I. 1979 No. 1660.) ] and theExchange Control Act itself was repealed by the Finance Act 1987. The power to issue stock warrantsto bearer is thus fully operative again. 

(FN1) The 1948 Act, Table A, art. 41, dealt with stock but there is no provision in the 1985 version. If the stock was created before the introduction of decimal currency in 1971 and was transferable inunits of less than 1p it may now only be transferred in units of 1p or multiples of 1p: Decimal Currency Act 1969, s 8(1).