The Features of a Joint Stock Company
When it comes to a joint stock company, one among the various types of business organizations which are instrumental towards the economic development in any country, the following are the various features:
Voluntary organization: A joint stock company is a voluntary organization or association of shareholders; 2.
Legal person: It is a legal or an artificial person as a result of law. It has no physical existence; however, it functions as a separate and independent legal person. Legal person is distinct from the shareholders and the directors of the company; 3.
Perpetual succession: The joint stock company has a perpetual or continuous succession under the law because it continues to exist even if some shareholders or directors die or become insolvent or leave the company by transferring their shares; 4.
Common seal: The joint stock company has a common seal which has to be affixed on its contracts and legal documents; 5.
Open membership: The membership is open to any person in any part of a country. It means anybody can become a shareholder of the company by purchasing the required number of shares of the company; 6.
Limited liability: The liability of shareholders is limited to the nominal value of the shares held by the shareholders; 7.
Free transferability of shares: The shareholders have liberty to transfer or sell their shares to any person and this transfer or sale has to be effected as per rules and regulations in force in the country; 8.
Management by elected board of directors: The management of the company is owned by its shareholders; however, it is managed by the board of directors elected by the shareholders; 9.
Fragmental rights of ownership: The shareholders enjoy a fragmented right of ownership due to the shares purchased by them; 10.
Dividends: Normally the profits of a joint stock company are annually distributed as dividends among the shareholders.
The rate of dividend is subject the surplus...
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