Joint Stock Company

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Joint Stock Company

Anxious investors wait for news about the South Sea Company, a joint stock company formed in London in 1711. Joint stock companies are a form of partnership in which each member, or stockholder, is financially responsible for the acts of the company. LIBRARY OF CONGRESS
Anxious investors wait for news about the South Sea Company, a joint stock company formed in London in 1711. Joint stock companies are a form of partnership in which each member, or stockholder, is financially responsible for the acts of the company.
LIBRARY OF CONGRESS

An association engaged in a business for profit with ownership interests represented by shares of stock.

A joint stock company is financed with capital invested by the members or stockholders who receive transferable shares, or stock. It is under the control of certain selected managers called directors.

A joint stock company is a form of partnership, possessing the element of personal liability where each member remains financially responsible for the acts of the company. It is not a legal entity separate from its stockholders.

A joint stock company differs from a partnership in that the latter is composed of a few persons brought together by shared confidence. Partners are not free to retire from the firm or to substitute other persons in their place without prior assent of all the partners. A partner's death causes the dissolution of the firm.

In contrast, a joint stock company consists of a large number of stockholders who are unacquainted with each other. A change in membership or a transfer of stock has no effect on the continued existence of the company and the death of a stockholder does not result in its dissolution. Unlike partners in a partnership, a stockholder in a joint stock company has no agency relationship to the company or any of its members.

A joint stock company is similar to a corporation in that both are characterized by perpetual succession where a member is allowed to freely transfer stock and introduce a stranger in the membership. The transfer has no effect on the continuation of the organization since both a joint stock company and a corporation act through a central management, board of directors, trustees, or governors. Individual stockholders have no authority to act on behalf of the company or its members.

A joint stock company differs from a corporation in certain respects. A corporation exists under a state charter, while a joint stock company is formed by an agreement among the members. The existence of a joint stock company is based upon the right of individuals to contract with each other and, unlike a corporation, does not require a grant of authority from the state before it can organize.

While members of a corporation are generally not held liable for debts of a corporation, the members of a joint stock company are held liable as partners.

In a legal action, a corporation sues and is sued in its corporate name, but a joint stock company sues and defends in the name of a designated officer.

References in periodicals archive ?
The GCC decided in December 1988 to allow GCC citizens to own shares of joint stock companies and transfer their ownership in accordance with the rules attached to the decision.
Dubai Financial Market (DFM) has announced that its listed local public joint stock companies have recorded a 100 per cent compliance regarding the disclosure of results for the second quarter of 2014.
Dubai Financial Market, DFM, today announced that its listed local public joint stock companies have recorded a 100 percent compliance regarding the disclosure of Q2-2015 results within the deadline of 45 days from the end of the period.
A total of 522 joint stock companies have been registered in Macedonia by 31 December last year.
Dubai: Dubai Financial Market (DFM) said its listed local public joint stock companies have recorded a 100 per cent compliance regarding the disclosure of second quarter results within the deadline of 45 days from the end of the period.
The forum discussed the importance of transforming the family businesses into public joint stock companies and the benefits that they attract to maintain what grandparents and parents had built from their work, their achievements and the wealth they created, through the development of the constitution of the family and the framework of governance within the rules and regulations of the CMA.
Muscat, Jan 29 (ONA) The Capital Market Authority (CMA) started getting the feedback of the joint stock companies, audit and legal firms about the first draft document related to amending the corporate governance chart, which was drafted by the corporate governance action team formed by CMA to revise the corporate governance chart for the joint stock companies and improve the corporate governance practices in the Sultanate.
Summary: Dubai Financial Market,or DFM announced that its listed local public joint stock companies have recorded a 100 per cent compliance regarding the disclosure of Q2-2013 results within the deadline of 45 days from the end of the period.
At the moment, only 32 joint stock companies are listed on the Macedonian Stock Exchange.
Summary: Muscat: The Capital Market Authority (CMA) has urged all joint stock companies and investment funds .
IFC plans to disseminate 3,000 copies of the manual to meet the high demand from more than 2,000 joint stock companies operating in the Kyrgyz Republic.
The Higher Education Ministry in association with the Capital Market Authority (CMA) yesterday organised a workshop on investment in joint stock companies at the ministry"s premises.

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