joint stock company

Joint stock company:

A joint stock company has come into existence to overcome the limitation of sole trading and partnership business. the major limitation of sole trading and partnership firms are limited capital and unlimited liability.
A joint stock company is a voluntary association of persons for establishing a business under the company act 2053.joint stock company is the distinct legal person created by law. Its capital is divided into large number of parts with equal value. this parts is called the shares. The company has only the means of collecting its capital by selling its share to the public as well as to the various organization. The persons who hold the share are called share holders.
"A joint stock company is the voluntary association of individuals for profit having a capital divided into transferable shares, the ownership is condition of membership. again a company is the artificial person created by law having a separate entity with a personal succession and a common seal"
The company is managed by the representative's o shareholders they are known as the board of directors. the members of board of directors are elected by the share holders. The company is the corporate body whose life is not connected with the life of shareholders. Hence, the life of the company is is perpetual or permanent. company is also called an artificial person being an artificial person, it affixes a common seal on all office.
A joint stock company has come into existence to overcome the limitation of sole trading and partnership business. the major limitation of sole trading and partnership firms are limited capital and unlimited liability.
A joint stock company is a voluntary association of persons for establishing a business under the company act 2053.joint stock company is the distinct legal person created by law. Its capital is divided into large number of parts with equal value. this parts is called the shares. The company has only the means of collecting its capital by selling its share to the public as well as to the various organization. al documents.teh company distributes the profit in the form of dividend to its share holders on the basis of their share holding.

Features of Joint Stock Company:

The essential features of joint stock company can be known through the following points.

1. Legal personality:

The company is an artificial person which is created by law. it exist only in contemplation of law and,therefore,has no physical shape or form. although invisible and intangible,as a legal person, it enjoys all the rights of a natural persons. it has the right to enter into contract and it can buy and sell properties in its own name. the company can borrow debts and conduct a lawful business. it can sue and sued.

2. perpetual existence:

Being an independent body, the life of the company is not connected with the life of the share holders. the law creates the company and the law itself brings the company into the end. company is the corporate body. in this company the share holders can buy or sell their share to the third persons. but transferable of share never affects the company.

3. Limited liability:
The limited liability is another important features of a company. if anything goes wrong with the company, the shareholder's liability is limited by the amount of shares holding.

4. Representatives of management:
A company is a large number of shareholders who cannot take active part in the management of the company. these shareholders elect their representatives for managing the company. the elected representatives are called directors. The group of directors are called board of directors.The directors of the company are the exclusive representatives of the shareholder's and are responsible for the administration and management of the company's initials affairs. the share holders are the risk bearers and directors are the risks taker.

5. Democratic management:

A joint stock company is a democratic organization. The decisions are taken in the annual general meeting and the board meeting by following the principles of management and of democracy.

6. Transferability of shares:

The shares of joint stock company is transferable except in the case of private limited companies. The share especially of public limited company ,are easily transfer to any body or from one person to another person prior permission of the company management. The shareholders can convert his shares into cash easily either by selling or transferring the share to other persons. The transfer of the shares changes the ownership but does not affect the regular functioning of the company and management.