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J O I N T  S T O C K  C O M P A N Y
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J O I N T S T O C K C O M P A N Y

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Published in: Economy & Finance, Business

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  • 1. FEATURES OF JOINT STOCK COMPANY
  • 2. BEFORE COMPANY ?
    • Sole proprietorship
    • Partnership
  • 3.
    • The definition of a sole proprietorship is "a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes."
    • The definition of a partnership is "a type of unincorporated business organization in which multiple individuals, called general partners, manage the business and are equally liable for its debts."
  • 4. PROS
    • the person and the business are one and the same.
    • All financial risks are taken by that person and all that person's assets are included in that risk.
    • A sole trader have almost complete control over how the business is run.
    • can make decisions without interference.
    • administrative costs of running a sole business are small.
    • a business run by two or more people together.
    • profits may be shared unequally, liabilities which may arise are shared jointly.
    • partnership is a very risky type of business because of all the potential for conflict
    • more money can be raised
    • The workload can be shared.
  • 5. CONS
    • All your personal assets are at risk if the business fails.
    • Personal bankruptcy can occur.
    • personal assets of each partner are at risk if the business fails.
    • Personal bankruptcy can occur.
    • Decisions are taken jointly.
  • 6. THEN ? Company
  • 7.
    • A company form of business orgnisation is known as a Joint Stock Company.
    • It is a voluntary association of persons who generally contribute capital to carry on a particular type of business, which is established by law and can be dissolved only by law.
    • Persons who contribute capital become members of the company.
    • This form of business has a legal existence separate from its members, which means even if its members die, the company remains in existence.
    • This form of business organizations generally requires huge capital investment, which is contributed by its members.
  • 8. COMPANY Chartered Companies Statutory Companies Registered Companies Limited Companies Unlimited Companies Guarantee Companies
  • 9. Characteristics
    • Voluntary Association
    • Compulsory Registration
    • Distinct Legal Entity
    • Artificial Person
    • Perpetual Succession
    • Common Seal
    • Limited Liability
    • Transferability of shares
    • Democracy in ownership
    • Social desirability
    • Periodic audit
    • Right to access information
  • 10. Sources of FINANCE Long-term Finance Medium-term Finance Short-term Finance
    • Issue of shares
    • Issue of debenture
    • Loans from financial
    • institution
    • Retained Profit
    • Public Deposit
    • Bank Overdraft
    • Loans from Promoters
    • Or Directors
    • Trade Creditors
    • Bank Finance
    • Accrued Expenses
    • Deferred income
  • 11. RELATION COMPANY PREFERENCE (ELDER BROTHER ) EQUITY (YOUNGER BROTHER ) DEBENTURE (NEIGHBOUR)
  • 12. Shares
  • 13. SHARES EQUITY SHARES PREFERENCE SHARES
  • 14. WHAT I HAVE ?
    • Real Owner
    • Primary risk bearer
    • Permanent source of capital
    • Voting right
    • Base for raising loan
    • Residual claim in the firm
    • Enjoy high profits
  • 15. THEN MY PROFIT ?
    • Assured dividend (Before equity)
    • Right to the return of capital on winding up before equity
  • 16. DEBENTURE
  • 17. My Features
    • Paid interest at a fixed rate irrespective of the amount of profit
    • Floating charge on the asset of the company
    • No right to vote

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