2. Meaning of joint stock company.
Types of joint stock company.
Advantages of joint stock company.
Disadvantage of joint stock company.
Features of joint stock company.
Conclusion .
Source.
3. "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“
5. The companies that form by the order of
the king of England are called the
charter company. These companies were
formed before 1844. For example, East
India Company, Chartered Bank of
England, the charter of the British
South Africa Company, given by Queen
Victoria (More information here
6. Companies that are formed by the order
of the President, or by the Legislative
Committee or by bill of Parliament are
called Statutory Company. These
Companies are operated by those laws.
For example, municipal councils,
universities, central banks and
government regulators, Central Bank.
7. Companies that are formed under the
prevailing law of the company are called the
registered company. The corporation that has
filed a registration statement with the SEC
prior to releasing a new stock issue. It is two
types
A)UNLIMITED CO-The liabilities of the
shareholders of this company are unlimited
8. B) LIMITED COMPANY- The liabilities of the
shareholders are limited. This liability of
company can be two type-
I)BY GUARANTEE
II)BY SHARE VALUE – The co limited by
share can be two type-
a) Private Limited Company-where the number
of shareholder ranges from two to fifty. The
share of these companies can’t be traded in
the stock market.
9. b)Public Limited Company- where the number
of shareholder ranges from seven to share
limitation. The share of the public limited
company is traded in the stock market.
10. A)HUGE RESOURCE-A company can raise
large amount of resources by issuing shares.
In case of public company.
B)Limited liability- The liability of the
shareholders is limited to the extent of the face
value of the shares held by them or guarantee
given by them.
C) Efficient management-A company can hire
the services of professional manager for its
functional areas because of its financial
strength
11. D)Public confidence- A company submits
required information to the Government and
other authorities at regular intervals.
E) Scope for expansion-A company can
generate huge financial resources by issuing
shares and debentures to finance new
projects.
12. A)DIFFICULTY IN FORMATION-The
formation of a joint stock company is very
difficult, time taking and expensive as
compared to any other form of organization.
B)DELAY IN DECISION MAKING-The Board
of Directors of the company decides about the
policies and strategies of the company.
Certain decisions are taken by the
shareholder
13. C) Lack of secrecy-Each and every business
strategy is discussed in the meeting of the
Board of Directors. The annual accounts are
published and compliance to Government,
Tax authorities etc. are made at regular
intervals.
D)Fraudulent management-The possibility of
starting a bogus company, collecting huge
sums of money and subsequently bringing
liquidation of the company is not ruled out.
The promoters with an intention to defraud
may indulge in such practices.
14. 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.
15. 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
16. 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
17. A joint stock company is good for all
like country, investor ,businessman .
Joint stock company engaged in
corporate social responsibility its good
for common people of the country.
A joint stock company deals in large
scale so the natural resources can be
utilized in proper manner.
