JOINT STOCK COMPANY

Joint Stock Company:
                            A company is an association of many persons. The capital
of the company is divided into small units called a share. Any one
who holds or buys a share in a company is called a shareholder.
Shareholders are the members of the company. A company is called
a joint stock company as the capital is contributed by a large number
of investors. A joint stock company may be a public company a
private company.
A company is defined as, “an incorporated association
which is an artificial person created by law having a common seal
and perpetual succession”.
A company is considered as a person by law. It can enter
into contract in its own name. It must have a common seal as it
cannot sign documents. A company has continuous perpetual
existence. The liability of a share holder is limited.
Shares can be freely transferred from one person to another.
It encourages the people to save even small amount.
A company is an artificial person. It acquires legal entity
through incorporation. Incorporation implies registration of the
company with the Registrar as a body corporate. Whether it is a
private company or a public company, it should be incorporated
with the Registrar of companies as per the Companies Act of 1956.
The management of joint stock company is entrusted to the board
of directors.