10 Characteristics / Features of Joint Stock Company

A company is an artificial person recognized by law, with a distinctive name, a common seal, a common capital comprising transferable shares of fixed value, carrying limited liability and having a perpetual succession.

Some features of joint stock company are given below:

Features of joint stock company

  1. Created by law: A company is created by law. There is no alternative way to form a company without law. It is operated and maintained according to Companies act-1994.
  2. Corporate artificial personality: A company is an artificial being invisible, intangible and existing only in contemplation of law. It can make legal claim to others in its own name and vice versa.
  3. Number of shareholders: In case of public limited company, the number of shares of that company restricts the maximum number of shareholders and the minimum number is seven. But in case of private limited company, the maximum number of shareholders is fifty and minimum two.
  4. Perpetual succession: Joint stock company has a perpetual existence. A joint stock company survives, even if all members are willing to shut down the company or if all members die in natural calamities.
  5. Own seal: Company has its own common seal which is to be used in preparing documents of the Company.features-of-joint-stock-company
  6. Limited liability: The liability of a shareholder is limited to the face value of the shares he holds. He has no further liability if he has paid the full value of the shares that he has subscribed.
  7. Tax payment In case of company, there are two system of tax payment. First, on the basis of profit earned by the company. Second, on the basis of dividend earn by the shareholders.
  8. Transferability of shares: Public limited company can enjoy the benefits of transferability of shares. However a private limited company cannot do it.
  9. Enough capital: Company has the opportunity to raise more capital than other forms of business because the number of shareholders is hunge. And if a company needs money it can sell its shares to the public.
  10. Separation of ownership from management and administration: Partners in a firm are not only the owners but they also take part in the management and administration of the business. But this is not possible in a joint stock company where the number of owners is huge.

Other Content of Joint Stock Company:

Leave a Reply

Your email address will not be published. Required fields are marked *