What Are The Features Of A Joint Stock Company?

A joint stock company is formed and established according to the requirements of companies' ordinance 1984. Registration of Joint Stock Company is compulsory by law. A company is registered at the office of Securities and Exchange Commission of Pakistan. Owner of the joint stock company are known as shareholders.

Joint Stock Company is a form of business organization that is owned by a large number of people. In case of private limited company minimum number of shareholders is 2 and the maximum is 50, while in case of public limited company minimum number of shareholders is 7 and there is no maximum limit.

Due to large number of owners it is not possible for each shareholder to participate in the management affairs of the business. Hence all the shareholders use their voting rights and elect a body for the management of routine affairs f the business. This elected body is known is Board of Directors. Hence board of directors are responsible to manage the affairs of the business. Profit and loss of company is divided among the shareholders according to the nominal value shares they held. Capital of the joint stock is divided into small units of nominal value. Each unit is known as a share. Shares of the public limited company are openly traded in the market. Hence company is in a position to collect maximum funds from the general public. Due to more capital and availability of skilled persons this form of business is suitable for large scale.

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