Common or General Features of Joint Stock Company
Joint Stock Company is a legal and invisible artificial being created by law. It is a company whose stock is owned jointly by the shareholders. It 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 Common or General Features of Joint Stock Company are described below-
Voluntary association: A company is a voluntary association of persons formed and incorporated under the existing law. Few people willingly can collectively construct a company. They voluntarily contribute money or money’s worth to a commas flock.
Complicated formation: The formation of a joint stock company is a very complicated process as it requires fulfilling strict legal procedures. Only when it gets a certificate of incorporation it comes into existence as a company.
Large-scale enterprise: Basically Joint Stock Company is a large-scale enterprise because of its huge capital collected from its huge members. Because of more members, a company has larger capital with compared to sole proprietorship and partnership which helps it grows as a larger scale business.
Professional management: The company appoints experienced, competent and experts to manage the business. Their services lead to managerial and administrative efficiency and accuracy.
Democratic management: The members of Joint Stock Company have the power of voting to elect the members of the board of directors. And this board of directors- takes the decisions for operating the functions of the company.
Huge capital: As Joint Stock Company raises its capital from shares and debentures, public deposits, loans etc., it has more chances to arrange the huge amount of capital which can help it in conducting business on a large scale.
Tax payment: Joint Stock Companies face double taxation rules or pay double taxes to the government. One is by paying the tax out of the profit of the company’s revenue. The other is being applied on the personal income of the shareholders.