2. MEANING OF JOINT STOCK COMPANY
Literally the word "company" denotes a group of
individuals who are associated for any lawful common
object, such as business, charity, research,
entertainments, sports etc. In this sense, even, a
partnership firm can be called a company, for instance
"M/s. Sonawala and Chandiwala& Co." Here the
expression "& Co.". merely suggests that persons
other than Sonawala and Chandiwala are in the
association. However, this company is not a company
in the legal sense of the term.
3. "A company is a voluntary organisation of many persons
who contribute money or money's worth to a common
stock and employ it in some trade or business and who
share the profit or loss arising there from. The common
stock so contributed is denoted in money and is the
capital of the company. The persons who contribute it or
to whom it belongs are members of the company. The
proportion of capital to which each member is entitled is
his share. The shares are of fixed value and the whole
capital of the company is divided into a large number of
shares. The shares are generally transferable, although
under certain circumstances the right to transfer may be
restricted."
4. From the above definition we can conclude that:
"the Joint Stock Company is an
Incorporated association which is an artificial person
created by law, having a separate name, a common seal,
a separate legal entity and perpetual succession.
The liability of its members is limited". The company has
a very large capital which is divided into smaller parts
called 'shares'. The shares are transferable. The persons
who subscribe to the shares are called 'shareholders' and
they are the owners of the company. They receive a share
called 'dividends' in the profits of the company.
5. DEFINITION AND MEANING
As per Section 2(20) of the Companies Act, 2013, the
term "Company has been defined as a company
incorporated under this Act or under any previous
company law". The definition of the company under this
Act can be more clarify as below:
Definition of Company {Section 2(20)}
Company means A company incorporated under:
This act (i.e. under the companies act 2013)
Any previous company law (i.e. companies act, 1956 or
earlier Indian company laws)
6. FEATURES OF A JOINT STOCK COMPANY
1.A Company is a Separate Legal Entity
One of the most distinctive features of a Company, as
compared to other organizations, is that it acquires a
unique character of being a separate legal entity.
Hence, when you register a company, you give it a
legal personality with similar rights and powers as a
human being.
2. Perpetual Succession
7. 3. Limited Liability
4. Artificial Legal Person
Artificial - because its creation is by a process other
than natural birth.
Legal because its creation is by law, and
Person - because it has similar rights to a human
being.
5. Common Seal
8. MERITS OF JOINT STOCK COMPANY
1. LargeCapital
2. Scope for Expansion
3. Perpetual Succession
4. Transferability of Shares
5. Ownership and Risk
6. Economies of Large-scale Operations
7. Availability of Expert Services
