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 ?
He pointed out that this rise in number of registered joint stock companies is due to the improvement of working environment and stability of investment climate in the sultanate.
The total number of UAE public joint stock companies listed on DFM, which disclosed their second quarter results, reached 46 companies.
Prior to RD 39/2014 which came into effect on August 2014 which amends the Insurance Companies Law , companies wishing to carry out insurance business in Oman were, among other things, required to be joint stock companies (either closed or a public joint stock company) with a paid up share capital of RO5mn.
The total number of UAE public joint stock companies listed on DFM which disclosed their second quarter results reached 42 companies, with the exception of Amlak Finance, as it is already suspended due to procedural reasons.
BMG Financial Group, claimed to be the first company licensed by the Capital Market Authority (CMA) in the Kingdom as a major investment bank in the Gulf region, stated that the forum highlighted the latest developments and the most important new directions for the capital markets in Saudi Arabia, as well as the exchange of experiences with family businesses, which turned into public joint stock companies, registered in the capital market.
Muscat: The Capital Market Authority (CMA) has urged all joint stock companies and investment funds to activate the Oman Social Responsibility Initiative, which was launched by CMA on November 2, 2009.
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.
A press release issued by the Ministry today said that Riyadh-based Saad Al-Mubti and Partners Contracting Company with a capital of SR 140 million, Makkah-based Saraya Mubarakah Hotel Management Company with a capital of SR 2 million, and Seihat City-based Alam Al-Muntazah Holding Company with a capital of SR 2 million, will be transformed from the limited liability companies to the closed joint stock companies.
The Ministry of Commerce and Industry of Kuwait has conveyed that Iranians are contributing to the capital of 1378 companies in Kuwait, of which 7 are joint stock companies and 1371 individual.
Ever since their beginnings, joint stock companies have been very interesting as a legal form, i.
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Al-Zamil Group is a diversified industrialist group established in both intermediate chemicals through direct investment, and in basic chemicals through two established Saudi joint stock companies that Al-Zamil group incorporated with others.

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