Tag: joint stock company 1 - definition, classification, advantages and disadvantages

A joint stock company has a continuous life. It implies death, insanity, insolvency or retirement of any of its shareholders, owners, board of directors or employees cannot lead to the closure of company. Company can run for a longer period of time.

A joint stock company has an independent status i.e. it has a separate legal entity from its members. It has an independent existence in the eyes of law and can also purchase and sell property in its own name.

A joint stock company is an artificial person. It does not have eyes, ears, nose etc. what generally a natural person have but is has an existence in the eyes of law i.e. it can purchase and sell property in its own name.

The joint stock company collects huge capital from public by dividing its capital in a small unit called shares and inviting subscription from general public on these shares. Holding these shares ensures dividend to the shareholders and provides them voting powers in the decision making process of the business.

A joint stock company is managed by the board of directors who are elected by the shareholders. All the shareholders are entitled to vote in the decision making process. Board of directors have powers in the management of the business.

The liability of the members in a joint stock company is limited while company itself has unlimited liability since it has its existence in the eyes of law and is considered as an artificial person.

A company secretary acts as an advisor to the board of directors and is responsible for the administration of a company, with regard to compliance  with statutory and legal requirements.

A joint stock company has an independent status i.e. it has a separate legal entity from its members. It has an independent existence in the eyes of law and can also purchase and sell property in its own name.

A joint stock company is an artificial person. It does not have eyes, ears, nose etc. what generally a natural person have but is has an existence in the eyes of law i.e. it can purchase and sell property in its own name.

Incorporation of a Joint stock company is compulsory. Without incorporation, all the contracts would be considered void in the eyes of law and operations of business cannot be carried out.