Tag: ownership structures - joint stock company

A joint stock company can be considered as a superior form of business organisation in which people come together to pursue a business activity and it also provides employment to the youth and helps in increasing the GDP of a nation.

It is true that joint stock company is an artificial person created by law. Company has a separate legal entity and have an existence in the eyes of law. It can purchase and sell property or rights in its own name and have a perpetual succession.

It is true that registering the company is optional. One can start the business with other ways also rather than registering like acquiring tax license, service tax registration.

The liability of the members of Joint stock company is unlimited i.e. assets of members cannot be used to pay the debts of company as company has a separate legal entity from its members and is termed as an artificial person in terms of law.

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 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.