Concept of Joint Stock Company
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). Shareholders are able to transfer their shares to others without any effects to the continued existence of the company
In modern-day corporate law, the existence of a joint-stock company is often synonymous with incorporation (possession of legal personality separate from shareholders) and limited liability (shareholders are liable for the company’s debts only to the value of the money they invested in the company). Therefore, joint-stock companies are commonly known as corporations or limited companies.
Before going for starting a business in company form of business, the entrepreneur must passes detail knowledge about the company. A good number of authors have defined .he company in their own ways and languages. Few important among them are presented below :
(1) Prof. L. H. Haney – “A Joint Stock Company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.”
(2) James Stephens – “A company is an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business, and who share the profit and loss arising therefrom.”
(3) Chief Justice Marshall -. “A corporation is an artificial being, invisible, intangible and existing only in the eyes of the law. Being a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence.”
Thus, a company may be defined as a legal and invisible artificial person, incorporated under an association of persons having an independent, separate legal entity along with perpetual succession and common seal, whose liability is ordinarily limited, the capital is divided into transferable shares, held by shareholders in order to earn profit.
Credit: PRASHANTH REDDY