A joint stock company is formed through a process that involves promotion, registration, and capital subscription. Promoters collect information needed for formation and prepare documents like the Memorandum of Association, which outlines the company's objectives and share types, and the Articles of Association, which contains rules for administration. For registration, promoters submit these documents along with registration fees to the registrar. Once incorporated, directors issue a prospectus to publicly raise capital. After sufficient funds are collected, the company receives a certificate to commence business operations. Joint stock companies allow for large capital through many shareholders and provide features like legal status, transferable shares, and limited liability.

1. JOINT
STOCK
COMPANY
-Formation and its Features
Presented By :
Aravindreddy M
18951A0582

2. "Joint stock company is a form of
organization which is capable of mobilizing
larger amount of capital with provision of
limited liability for owners and affording
professional management to conduct its
business“
Meaning of Joint Stock Company :

3. Joint Stock Company
Chartered
company
Registered
company
Limited by
promise
Limited by
share
Public
Limited
Private
Limited
Statutory
company

4. Formation of Joint Stock Company :
Joint Stock Company
Promotion
Registration
Capital
Subscription
Commencement
Of Business

5. Promoters:
 Some people join together with the aim to start a company and
are called Promoters.
 They act as the first directors to formulate the company.
 The promoters collect all the information needed for the
formation, promotion and financial requirement of the business.
 Promoters also prepare the important documents required for
the formation of the company.
 Promoters also follow up the process to get the certificate of
Incorporation.
 In case of Public companies , Promoters take the required steps
to pool the share capital.

6. Necessary Documents required for the
formation of Joint Stock Company:
Memorandum of
Association
Article of
Association
Prospectus For
Registration

7. Memorandum of Association:
 Aim and Objectives of the company
 Different types of shares
 Ways of Subscription
The memorandum of association should contain :
Articles of Association:
The Articles of association should contains the rules and
regulations of the administration of the company.

8. Registration:
 For Public companies, a name has to be chosen which should not be
identical to any existing company.
 The promoters then need to submit the requisition letter along with
all the necessary documents and prescribed fees to the register.
 The requisition letter should contain :
=>Proposed name of the company
=>Name and Address of first seven directors.
=>Consent to act as a first Directors
=>TwoWitnesses
 All the requisition letters should be signed by first seven directors
and counter signature by Chartered accountant or Practicing
Supreme Court Advocate

9. Capital Subscription:
 Once the directors receive the
certificate of incorporation , they issue
the prospectus(brochure) to the public
which results in start of capital
subscriptions of the company .
 Private companies cannot issue
prospectus and however in place of
prospectus they submit statements to
the registrar.

10.  A public limited company cannot
commence business just by raising
capital.
 In order to start a business a public
limited company should get a
certificate called the certificate to
commence the business from
registrar.
Commencement of business:

11. A)An artificial person
The company enjoys all the rights as
a citizen of a country would enjoy. It 'can own
properties, enter into contracts.
B) Separate legal entity
The company is separate from the persons
who own it . The company cannot be held responsible for
any misdeeds of the members.

12. C)Large capital
A Joint Stock Company can generate
huge amount of money towards capital, because the
number of persons contributing towards capital are more in
number when compared to Sole Proprietorship or
Partnership organization.
D)Common seal
The company, being an artificial being,
cannot affix its signature on the documents on its own.The
common seal is used in place of a signature

13. E)Legal formation
The formation of a Joint Stock Company is
governed by the rules and regulations laid down in the
Companies Act, 1956.
F)Transferability of shares
The shares of a Joint Stock Company are
easily transferable from one person to another, since it is a
Public Limited Company

14. THANK
YOU