Types of Business Entities: Joint Stock Company

 

Forms of Business Entities

There are different types or form of business.

But according to syllabus only three types of business are mentioned; they are:

1. Sole proprietorship

2. Partnership firm

3. Joint Stock Company

 

 

Joint Stock Company

Joint Stock Company is also known public limited company.

It is the largest company among all other types of company.

Joint Stock Company is established with equity share or common stock. The minimum shareholders must be five but maximum shareholders depend on share capital.

Joint Stock Company has separate legal existence.

There are two types of Joint Stock Company.

They are Service Provider Company and productive company.

For the development of the country, productive joint stock companies are required.

 

joint stock company or limited company

 

#######

Click on link for YouTube videos topic wise  

ACCOUNTING EQUATION http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz

LEDGER http://tiny.cc/haakkz

SUBSIDIARY BOOK http://tiny.cc/399jkz

CASH BOOK http://tiny.cc/889jkz

TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

#######

Click on link for YouTube videos chapter wise  

Financial Accounting and Analysis (All videos) http://tiny.cc/jlersz

Accounting Process http://tiny.cc/mlersz

Accounting for Long Lived Assets http://tiny.cc/plersz

Analysis of Financial Statement http://tiny.cc/slersz

#####

 Characteristics or Features of Joint Stock Company

The main characteristics of Joint Stock Company are as follows:

An artificial person

A company is an artificial person created by law and having a separate existence of its own.

Like a real person, it can buy or sell the property in its own name.

It can sue and can be sued by others.

It can conduct a lawful business and enter into contracts with others.

 

Separate legal entity

A company is a separate legal entity from its owners.

A company cannot be held liable for the actions of its owners and similarly a shareholder cannot be held liable for the acts of the company.

 

Perpetual succession

A company is created by law and only law can liquidate it.

The death, insolvency, inability or lunacy of members does not affect the life of a company.

Members may come and go, but the company runs perpetually.

 

Limited liability

The liability of every owner or shareholder of a company is limited to the extent of the face value of the shares purchased.

Even if, the assets of the company are not sufficient to pay the claims of the creditors, no owners or shareholders bound to pay anything more than the face or nominal value of the shares held by them.

Transfer of shares

The capital of the company is divided into a number of units, which are called shares.

These shares are transferable.

A shareholder is free to withdraw his membership from the company by transferring shares.

The holding of shares can be transferred from one person to another mainly by selling.

 

Common seal

Being an artificial person, the company cannot act and sign itself.

It acts through its officers.

A common seal is the official signature of a company.

All the acts of the company are authorized by its common seal.

All the documents are attested by the common seal for making valid documents.

 

Representative management

There is a separation between ownership and management of a company.

Shareholders do not participate directly in day-to-day activities of the company.

Therefore, they elect their representatives from among themselves. These representatives manage the company on behalf of the shareholders.

They are called directors. The directors are the legal representatives of the shareholders.

#####

***********

Thank you for investing your time.

Please comment on article.

You can help me by sharing this article at your social media platform.

 

Jay Google, Jay YouTube, Jay Social Media

जय गूगल, जय युट्युब, जय सोशल मीडिया