JOINT STOCK COMPANY
A joint stock company is a voluntary association of individuals for profits, having a capital divided into transferable shares, the ownership of which is the condition of ownership.
JUSTICE MARSHALL has defined a company “ AS A PERSON, ARTIFICAL, INVISIBLE, INTANGIBLE, and EXISTING ONLY THE EYES OF LAW.being a creation 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: among the most important of which are immortality and individuality .”
The above definitions reveal that a joint stock company represents an incorporated association of persons who contribute money to a common represents an incorporated association of persons who contribute money to a common stock known as the capital of the company. The capital of a company is held jointly by the shareholders. That is why it is known as a joint stock company independent from that of its members. Its shares are transferable and its life is not affected by the incoming and outgoing of its members.
#FEATURES OF JOINT STOCK COMPANY
1.District legal entity: A company is an artificial person created by law. So it has an existence independent of its members. It can own property, enter into contracts in its own name and conduct any lawful business. It can own property, enter into contracts in its own name and conduct any lawful business. It can sue and can be sued. Shareholders are neither the owners nor the agents of the company
2.Perpetual existence: A joint stock company has a perpetual succession. Its existence is not affected is not affected by the death, lunacy, or bankruptcy of its members. it holds shareholders may go by selling their share and new shareholders may come, but the existence of the company is not affected as the company is created by law.
3.Limited liability: Since the company has a separate legal entity, its members can not be held liable for the debts of the company. The liability of every member cannot be held liable for the debts of the company. The liability of every member of a limited company is limited to the nominal value of the shares subscribed by him to the amount of guarantee given by him. A member cannot be asked to pay more than what is due from him in respect of shares allocated to him if the assets of the company are not sufficient to meet fully the claim of its creditors.
4.Transferability of shares: The shares of companies are transferable except in the case of private companies. Every shareholder of a public limited comapany is free to transfer the shared held by him to any body else.
5.Separation of ownership and management: Separation of ownership and management has to become an important feature of joint-stock companies. The number of persons who hold the shares of a company is generally very large. The shareholders have no right to participate in the day to day administration of the affairs of the company. They have the right to elect representative or directors who will manage the company.
6.Separate property: So a company, being a legal person is capable of owning, using disposing of property in its name. Shareholders are not the joint owners of the company ‘s property.
7.Common seal: As an artificial person, a company cannot act and sign itself. It acts through human beings known as directors. All the acts of the company done through the directors are authenticated by the common seal of the company. The common seal of a company is affixed on all important documents as a token of the company’ s approval.The common seal is the official signature of the company. Any document which does not bear the common seal of the company is not binding on the company.