Joint Stock Companies

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Joint Stock Companies
Among the different forms of business organizations which are functioning as at present, the predominant form of business organization during these modern days is found to be joint stock companies. Joint stock companies are termed as corporations in United States. Such form of business organization is necessary to undertake any business or industry on a large scale. This is because it overcomes the drawbacks of sole proprietorship and partnership.

Such form of business organization is necessary to undertake any business or industry on a large scale and this is because it overcomes the drawbacks of sole proprietorship and partnership.

According to Mr. Kuchaa, a joint stock company is defined as mentioned below: “An incorporated association which is an artificial legal person, having independent legal entity, with perpetual succession thereby carrying limited liability”.
A joint stock company is a voluntary association of shareholders or stockholders duly incorporated who contribute to the common stock of which they are the owners. However, all of them do not directly manage it and it is managed by some directors elected by the shareholders and their liabilities are limited to the value of the shares held by them. They share the profits and losses equally.

How the joint stock company is formed? In order to commence any joint stock company, a minimum of seven persons have to come together and those who take initiative to start the company are called as promoters. The promoters of a company have to get the company incorporated by filing with the Registrar of companies various documents namely; memorandum of association, articles of association, prospectus, list of persons who have agreed to function as directors of the company etc.,
The Memorandum of association: This gives information about the company namely, the place of location, its objects, the amount of capital to be raised etc.,

The articles of association: The information

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