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

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 and they are even termed as the owners.

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 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.

Earlier, the Act which regulated the Joint stock company is the Companies Act 1956. But this Act has been amended recently in the year 2013, known as Companies Act 2013.

The amount contributed by shareholders in the joint stock company is termed as the share capital as it is the capital invested in the company form of business or it is the small unit in which the capital of company is divided.

The amount contributed by shareholders in the joint stock company is termed as the share capital as it is the capital invested in the company form of business or it is the small unit in which the capital of company is divided.

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.

In joint stock company there is separation of ownership and management and it involves placing the management of the firm under the responsibility of professionals who are not its owners. Owners of a company may include shareholders, directors, government entities and initial founders.

One of the feature of joint stock company is that it has a perpetual existence that implies death or insanity of any of its member, board of directors, employees or shareholder cannot lead to the closure of company. It has a long business life i.e. cannot be easily diluted.

The large scale business can be easily carried out by Joint stock company as capital can be easily accumulated by inviting subscriptions from the general public in the form of shares and companies have a long and stable life i.e. perpetual succession.