JOINT STOCK COMPANY AND ITS FEATURES

MAY 14

DAY 4

THANK YOU BOYS FOR LOGGING IN! 

GOOD MORNING BOYS!

PLEASE MARK YOUR ATTENDANCE FIRST THROUGH THE FOLLOWING LINKS:

XI A- https://forms.gle/G3V6k5aW82qbSVc47

XI B- https://forms.gle/5sZa82phzuy4YN1a8

LET US NOW START THE LAST FORM OF BUSINESS ORGANISATION WHICH IS JOINT STOCK COMPANY:

LEARNING OUTCOMES- At the end of the topic, students will be able to:

1) Explain the meaning of Joint Stock Company.

2) Discuss the features of Joint Stock Company

I WILL START THE TOPIC WITH A SMALL VIDEO:

NOW TAKE DOWN THE NOTES:

Q.22 What is Joint Stock Company? Explain the features or charateristics of joint stock company. (6)

                                                                         OR

 "A company is a seperate legal entity with perpetual succession and common seal."Explain this statement. (6)

Ans- The joint stock company is established under the Companies Act, 2013 . It is described as an artificial person with a seperate legal entity with perpetual succession and a common seal .The companies receive funds either from its owners in the form of share capital or through borrowings from outsiders.

The affairs of the company are managed by the Board of Directors, a managing body elected by the shareholders of the company.

The features of joint stock company are explained as follows:

1. Artificial Person-

a)A joint stock company is created by law and has a legal status but it cannot function like a normal human being.

b) All business activities are conducted in the name of the company like signing of contract, sue and be sued, etc in its own name. Since the company cannot act like a normal person. For example- company cannot see, walk, talk, etc .So it is considered as an artificial person.

2. Seperate legal entity-

a) The company receives a legal status which means that it has a separate legal entity from its

members.

b) The company can own property, incur debts, borrow money , enter into contracts, sue and be

sued in the court of law . Its assets and liabilities are separate from its owners.

3. Perpetual Succession-

a) A company is created by law and can be brought to an end by law only.

b) Members may come and go but the company goes on and on. It exists independent of its

members and it can be closed only through the legal procedure of winding up .

4. Control-

a) The business of a company is managed and controlled by the board of directors who appoints the top management officials for running the day-to-day business .

b) Though shareholders do not have the right to control the business activities but the Board of

directors are accountable to the shareholders.

5. Common seal-

a)The company being an artificial person acts through its board of directors.

b) Common Seal is the official signature of the company which is engraved on all the important

documents of the company which not only approves the agreement entered by the directors with outsiders but also binds the company legally . Any document without a common seal does not bind the company legally.

6. Transferability of shares-

a) The shares of a company are freely transferable .

b) A shareholder of a public company can sell its shares to any individual in the open market or at a stock exchange at the market price. There is no need to take any permission from the board of directors or other shareholders.

YESTERDAY'S ANSWERS:

1) A minor in JHFB is a coparcener in the family business. This member is of age below 18 years. He becomes member in the business by birth therefore each minor is member of business by default. Whereas a minor partner in a partnership business is a partner of age 18 years. A minor partner cannot become a partner of a firm but he/she is entitled to all benefits of a partnership with the mutual consent of all partners.

2) Cooperative Societies truly symbolize the democratic and secular practices because:

1) It runs on the principle of 'One Man, One Vote'

2) They permit membership to any person regardless to caste, religious or gender.

3) They are managed by the members and for the members.

TODAY'S QUESTIONS:

1) If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.(3)

2) For what types of business is partnership form most suitable.?(3)

GOD BLESS YOU ALL!