ARE THERE ANY LIMITATIONS FOR SOLE TRADERS & PARTNERSHIP BUSINESS ? YES ! THERE ARE SOME PROBLEMS Financial Burden Management problems High risks Limited liability…………… NOW a question? how can you overcome these problems ? Any idea? Exactly! It is ,JOINT STOCK COMPANY. start We are going to discuss about Joint stock company in chapter 1 Corporate organization JOINT STOCK COMPANY • It is a voluntary association formed by some persons for profits with a capital divided into transferable shares, having a corporate body and a common seal. JOINT STOCK COMPANY • Definition: According to 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.” FEATURES OF JOINT STOCK COMPANY 1.Separate legal entity: It has an existence entirely distinct from an independent of its members. It can own property and enter in to contracts in its own name. It can sue and be sued in its own name No member can directly claim the ownership right in the assets of the company. FEATURES OF JOINT STOCK COMPANY 2.Artificial Legal person: .Company is an artificial person created by law .It is intangible and invisible having no body and no soul. Like a natural person, it has rights and obligations in terms of law. . FEATURES OF JOINT STOCK COMPANY 3.Perpetual existence: A company enjoys continuous existence. Its life is not affected by the death,insolvancy,luncy etc.. Company die only through the legal process of winding up. FEATURES OF JOINT STOCK COMPANY 4.:Limited liability: Members liability is limited to the face value of the shares subscribed. The personal property of the members cannot be attached to satisfy the claims of the creditors of the company. FEATURES OF JOINT STOCK COMPANY 5.Common seal: A company being an artificial person cannot sign itself. So law provides the authority to sign by using common seal. FEATURES OF JOINT STOCK COMPANY 6.Transferability of shares The shares of a public limited company are freely transferable. They can be purchased and sold through the stock exchange. Every member is free to transfer his share to any one without the consent of other member. FEATURES OF JOINT STOCK COMPANY 7.Separation of ownership and management: Members in a public company is very large They cannot take active part in the day to day management. There fore we elect a representative known as director to manage the company. Board of directors act as the agents and trustees of the company. FEATURES OF JOINT STOCK COMPANY 8.Voluntary association It is an incorporated association of persons. One person cannot constitute a company under the law. In a public company at least 7 person and in private at least two are required. Every member can free to join and leave the company. FEATURES OF JOINT STOCK COMPANY 9.Corporate finance: joint stock company raise huge amount of capital by issuing shares. There is no limit in the number of members in a public company. FEATURES OF JOINT STOCK COMPANY 10.Statutory regulation and control In order to protect the interest of investors, the organization is controlled by government through law. It must follow the companies act 1956 Accounts is audited by chartered accountant.