FEATURES OF JOINT STOCK COMPANY
BEFORE COMPANY ? <ul><li>Sole proprietorship   </li></ul><ul><li>Partnership </li></ul>
<ul><li>The definition of a sole proprietorship is &quot;a business structure in which an individual and his/her company a...
PROS <ul><li>the person and the business are one and the same.  </li></ul><ul><li>All financial risks are taken by that pe...
CONS <ul><li>All your personal assets are at risk if the business fails.  </li></ul><ul><li>Personal bankruptcy can occur....
THEN ? Company
<ul><li>A company form of business orgnisation is known as a Joint Stock Company. </li></ul><ul><li>It is a voluntary asso...
COMPANY Chartered Companies  Statutory  Companies  Registered  Companies  Limited Companies  Unlimited  Companies  Guarant...
Characteristics <ul><li>Voluntary Association  </li></ul><ul><li>Compulsory Registration  </li></ul><ul><li>Distinct Legal...
Sources of  FINANCE  Long-term Finance  Medium-term  Finance  Short-term Finance  <ul><li>Issue of shares </li></ul><ul><l...
RELATION  COMPANY  PREFERENCE (ELDER  BROTHER )  EQUITY  (YOUNGER  BROTHER ) DEBENTURE  (NEIGHBOUR)
Shares
SHARES  EQUITY  SHARES  PREFERENCE  SHARES
WHAT I HAVE ? <ul><li>Real Owner  </li></ul><ul><li>Primary risk bearer  </li></ul><ul><li>Permanent source of capital  </...
THEN MY PROFIT ? <ul><li>Assured dividend (Before equity) </li></ul><ul><li>Right to the return of capital on winding up b...
DEBENTURE
My Features <ul><li>Paid interest at a fixed rate irrespective of the amount of profit  </li></ul><ul><li>Floating charge ...
Upcoming SlideShare
Loading in...5
×

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

366

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
366
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

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

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

×