What is joint stock company? Mention its salient features?

Answer 1

A joint stock company is a type of business vehicle where the capital of the company is divided into shares and the liability of the members is limited to the amount unpaid on the shares held by them.

Salient features of a joint stock company include:
1. Limited liability: The liability of the members is limited to the amount unpaid on the shares held by them.
2. Separate legal entity: A joint stock company is a separate legal entity distinct from its members. It can own property, sue and be sued in its own name.
3. Perpetual existence: A company has perpetual existence, meaning its existence is not affected by the death or insolvency of its members.
4. Transferability of shares: Shares of a joint stock company are freely transferable, allowing for easy transfer of ownership.
5. Management by board of directors: A joint stock company is managed by a board of directors elected by the shareholders, who make major decisions on behalf of the company.
6. Large number of members: A joint stock company can have a large number of members, allowing for diversification of ownership and investment.
7. Disclosure and transparency: Joint stock companies are required to disclose information about their financial performance, operations, and governance to ensure transparency and accountability.