Equity interest

Equity interest is the ownership share of a stockholder in a business. For example, having a 15% equity interest in a company means that a shareholder owns 15% of the business. An equity interest does not necessarily mean that a shareholder is entitled to any amount of income from the business. Only if a business generates positive cash flow can it issue dividends to its shareholders. However, if the business is eventually sold off or liquidated, the shareholder will be paid his proportional share of any residual interest remaining after all creditor claims have been settled.