It facilitates the mobilization of savings of millions for the productive purposes. What is a Joint-Stock Company? Incorporated association: A company is called an incorporated association because it comes into existence only after registration. It is formed by members voluntarily joining the organisation and contributing money or money’s worth for the business. Separate legal entity: It implies that the company is created as a separate legal entity by law and is a juristic person. AN Artificial Person; A company is called an artificial person. Disclaimer Private Limited Company and 2. The following are some of the features of a Joint Stock Company 1. The common seal is used in place of a signature. You may need to download version 2.0 now from the Chrome Web Store. Features & Characteristics of Joint Stock Company. 8. Whereas a partnership or a sole proprietor, it has no such legal existence apart from the person involved in it. Join now. Complete Features of Joint Stock Company Commerce Video | EduRev chapter (including extra questions, long questions, short questions) can be found on EduRev, you can check out Commerce lecture & lessons summary in the same course for Commerce Syllabus. The following are the features of a Joint Stock Company: Registration of the Joint Stock Company is important as it gives the company a legal right. Joint Stock Company – Advantages and Disadvantages Advantages of Joint Stock Company: (1) Huge Financial Resources: As compared to sole proprietorships and partnership firm, a joint stock company can accumulate huge amount of funds. A chartered company is regulated by the terms of its charter. Joint Stock Company formation and features 1. A careful analysis of the above mentioned definitions reveal the following important characteristic feature of a Joint Stock Company. Artificial person: A company is a creation of law and exists independent of its members. ADVERTISEMENTS: After reading this article you will learn about the advantages and disadvantages of joint stock company. As a result it can derive all the advantages of large scale production. The shares of a Joint Stock Company are simply transferable from one person to another, since it is a Public Limited Company. Company operates in its own name under … Few people willingly can collectively construct a company. The Joint Stock Company can have a long term existence as a company and is not affected by any changes to the company members or death. Chartered Company: Formerly in Great Britain, the government, through the Royal Charter formed companies for specific purposes, e.g. It is a person created by law. “Men may come and men may go, but a company will go until it is wound up.”. Economies of large-scale operation: A joint stock company can undertake business on large scale. It is an artificial person recognized by law, with a distinctive name, a common seal, a common capital comprising transferable shares of fixed value carrying limited liability and having a perpetual succession. A joint stock company has been defined in a number of ways. Audit of Accounts of Joint Stock Company . Common seal 5. PreserveArticles.com: Preserving Your Articles for Eternity. Is a company whose capital is divided into trad-able shares that are put on the stock market and sold to investors. 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 organisation. Joint Stock Company is simply an artificial person created by law. The following are some of the features of a Joint Stock Company. Joint-stock companies are created in order to finance endeavors that are too expensive for an individual or even a government to fund. A careful analysis of the above mentioned definitions reveal the following important characteristic feature of a Joint Stock Company. Find an answer to your question Explain the features of joint stock company 1. It ‘can own properties, enter into contracts etc. This feature helps to attract a large number of small investors to invest in the company. Advantages . (Company Act, 1994) A joint stock company is ‘an association of many persons who contribute money or money’s worth to a common stock and employ it for a common purpose’. Only when it gets certificate o incorporation it comes into existence as a body corporate. "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. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company. Calculate the total amount of proceeds raised by Smith & Co.Solution:The total amount of proceeds raised by Smith & Co. is $15,000. Since their personal wealth is safe, they are encouraged to invest in joint stock companies; The shares of a company are transferable. He has no further liability if he has paid the full value of the shares that he has subscribed to. 8. The company cannot be held responsible for any misdeeds of the members. A joint stock company is a voluntary association of certain persons formed to carry out a particular purpose in common. Speculation: A few individuals may corner the shares to gain control over the company. are governed by the provisions of the Companies Act. Since huge amounts are collected as capital, the operation of the business will generally be on a large scale basis. Artificial Legal Person: - A company is artificial person created by law. Without these features of joint stock companies, it would have been better to call it a firm rather than a company form of organization. So a joint stock company can enter into agreements with third parties. Artificial person: A company is an artificial person created by law. Thus, the management of a joint stock company might become oligarchic in character. So the members of the joint stock company are not liable to the company and are … Join now. Separation of Ownership and Management - In the case of a Joint Stock Company, there is a separation of ownership and management. Some Common or General Features of Joint Stock Company are described below-Voluntary association: A company is a voluntary association of persons formed and incorporated under the existing law. The important features of a joint stock company are the following – an artificial person created by law, with a distinctive name, a common seal, a common capital with limited liability, and with a … For e.g. The continuity of the business is not affected by the death, insolvency or insanity of any member. The personal asset of a shareholder cannot be used to pay the company’s liabilities. The stock of the company is the machines, plants, patents and so on and this is owned jointly. What are the Advantages and Limitations of joint stock companies? Similar to a natural person, a company has the right to buy/sell/own property in its own name, enter into contracts and agreements and also lend/borrow money. Features of a Company A Company is a Separate Legal Entity. Each investor owns a small part of the whole. Limited liability 6. The shareholding company is a legal and personal entity independent of the owners of the equity. The company form of organisation is considered to be most suitable for organising business activities on a large scale. Features of Joint Stock Company. Separate Legal Entity: A joint stock company has a separate legal existence apart from the persons composing it. Adequacy of capital: Generally a Joint Stock Company has the opportunity to raise huge capital than other types of business. Our mission is to liberate knowledge. Joint Stock Company is a new venture in the big business area. 4. ADVERTISEMENTS: The important characteristics of a Joint Stock Company are as follows: 1. In case of private limited company, minimum number of shareholders is 2 and the maximum is 50, while in case of public limited company minimum number of shareholders is 7 and there is no maximum limit. With adequate capital it can employ trained and experienced managers to run the business activities efficiently. Merit may not be given importance. PreserveArticles.com is an online article publishing site that helps you to submit your knowledge so that it may be preserved for eternity. Limited Liability: In the part of the joint stock company, the liability of members is limited in nature. There are two kinds of joint stock company: Private and public companies. Economies of large-scale operation: A joint stock company can undertake business on large scale. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. It is an association of persons who contribute money which is called capital for some common purpose. Nepotism: Directors and managing agents may appoint their own relatives as the important officers of the company. The Company has a separate legal existence. Get link; Facebook; Twitter; Pinterest; Email; Other Apps; Comments. 5. Compulsory incorporation: A company is a voluntary association of persons formed and incorporated under the existing Corrine law. Joint Stock. The company is separate from the persons who own it. their liability is only limited up to the unpaid amount on their shares. It is created by legal process and not by natural birth. Features of joint stock company April 14, 2020 Join stock company. Essential Features of Joint Stock Company Artificial Legal Person. TOS The shares of a Private Limited Company or Government Company are not transferable. Definition of Joint Stock CompanyDefinition of Joint Stock Company Company means a company formed and registered under this Act or existing company. It is competent to enter into contracts and to own property in its own name. These persons are members of the company. The Joint Stock Company can have a long term existence as a company and is not affected by any changes to the company members or death. Chief Features of Joint Stock Company: Formation : Generally a company is formed with the initiative of a group of members who are also known as promoters but it comes into existence after completing all the formalities prescribed in Companies Act 1956. Log in. All policies of the company … ثبت شرکت ، ثبت برند ، اخذ کارت بازرگانی و اخذ رتبه بندی در کمترین زمان با ثبت کریم خان برای مشاوره با شماره 87146 تماس بگیرید. The company, being an artificial being, cannot affix its signature on the documents on its own. Limited liability: The liability of a shareholder is limited to the face value of the shares he holds. Distinguishing Features of Joint Stock Company: ADVERTISEMENTS: Some of the distinguishing features of a company are the following: 1. The share is assigned a nominal value. Artificial person: Unlike human beings, a company, as an artificial person, cannot sign its documents and negotiate with its customers. A company is an artificial person and has a legal entity quiet distinct from its members or owners. Log in. It is an association of persons who contribute money which is called capital for some common purpose. It is a form of business organization that is owned by a large number of people. Public Limited Company What is a Private Limited Company? ویژگی های مشترک شرکت سهامی. Features of a Company A Company is a Separate Legal Entity. Hence, in a private limited company … Stock On Essay Company Features Joint. The silent features of company form of organization are as under:-. If the company needs money it can sell its shares to the public. 1. It can own property and sue in a court of law. One of the most distinctive features of a Company, as compared to other organizations, is that it acquires a unique character of being a separate legal entity. Features of Joint Stock Company; Advantage of Joint Stock Company; Company Limited by Shares: In this type of registered company the liability of its members is limited up to the value of the shares purchased by them. It ‘can own properties, enter into contracts etc. 7. The company works in its own name under a common seal.it has separate entity from it, members. The shareholders being large in number cannot look after the day-to-day activities of the company. It also helps the company to raise a huge amount of capital. Large Capital: The outstanding advantage is that it allows vast mobilization of capital which otherwise is […] 6. Their liability is limited so that if the business fails they do not then have to pay more to cover any debts. Advantages of Joint Stock Company. A Joint Stock Company is a voluntary association of persons to carry on the business. The shares of a Private Limited Company or Government Company are not transferable. A Joint Stock Company is an autonomous and self-governed body. After audit of accounts of a company, auditor has to submit a audit report to the shareholders at annual general meeting in prescribed format. They voluntarily contribute money or money’s worth to a commas flock. It has got separate legal existence. A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders.Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Incorporated association: A company is called an incorporated association because it comes into existence only after registration. A joint stock company is a voluntary association formed by people to carry on a certain business for profit. Voluntary Association The above important features are explained briefly as under: 1. The management is however headed by owners who are elected directors. 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