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Trading and Investment Terms

Joint Stock Company

The new age organization has its roots in the joint stock organization.

 

A joint stock organization is a business owned by its shareholders, with every shareholder possessing a share based on the sum of equity bought.

 

Joint stock companies are made so as to back undertakings that are highly expensive for a single person or even a government to support.

 

The proprietors of a joint stock organization expect to share in its benefits.

 

Except if the organization is incorporated, the investors of a joint stock organization have boundless liability for obligations of the organization.

 

The legal process of incorporation, in the United states of America, diminishes that liability to the par value of stock possessed by the investor.

 

In Great Britain, the expression "limited" has a similar implication.

 

The equities of a joint stock organization are transferable.

 

In the event that the joint stock organization is public, its equities are exchanged on registered stock market exchanges.

 

Equities of private joint stock organization stock are transferable between people, but the transfer procedure is often restricted by agreement, to relatives, for instance.

 

Historically, shareholders of a joint stock companies could have boundless liability, implying that an investor's personal property could be seized to take care of obligations and debts in the event of an organization collapse.

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