Advantages n disadvantages of joint stock company

2020-01-17 12:40

Advantages of Joint Stock Company: (1) Huge resources: A company can raise large amount of resources from the genera public by issuing shares. Since, there is no maximum limit of the number of shareholders ii case of public company, fresh shares can be issued to meet the financial requirement.Advantages of Joint Stock Company: The joint stock company type of organization has become very popular throughout the world because of many advantages. Some of the advantages are as follows: 1. Financial Strength: The joint stock company can raise a large amount of capital by issuing shares and debentures to the public. advantages n disadvantages of joint stock company

Following are the advantages of Joint Stock Company: 1. Limited Liability: Liability of members of Joint Stock Company is limited to the extent of shares held by them. Hence shareholders assets will not be on stake. This feature attracts large number of investors to invest in the company.

Disadvantages of a Joint Stock Company. One disadvantage of a joint stock company is the complex and lengthy procedure for its formation. This can take up to several weeks and is a costly affair as well. According to the Companies Act, 2013 all public companies have to provide their financial records and other related documents to the registrar. Disadvantages of a Joint Stock Company. 11. Evils of large scale business: The company is a large scale enterprise, so it naturally inherits the demerits of the large scale enterprise. There would be problems in coordination and control. Any failure of a company would affect advantages n disadvantages of joint stock company Advantages of a Joint Stock Company: 1. Large Capital: The outstanding advantage is that it allows vast mobilization 2. Vast Scope of Expansion: The vast capital collected by means of shares coupled with 3. Limited Liability: The liability of the members of the company is limited. 4.

The Advantages and Disadvantages of Preference SharesExplained! Useful Notes on Joint Shareholders (Indian Companies Act, 1956) 6 Prerequisites that Must Be Followed by a Joint Stock Company During Incorporation; Ten differences between a joint stock company and a partnership firm advantages n disadvantages of joint stock company Advantages of Joint Stock Company. The members of a company may go on a company. The stability of business is of great importance to the society as well as to the nation. Flow of Risk: In sole proprietorship and in the partnership business, the risk is shared by few persons. But in the company, the number of shareholders is large, Disadvantages of joint stock company. Double taxation: In case of company, there are two systems of tax payment. First, on the basis of profit earned by the company. Second, on the basis of dividend earn by the shareholders. So the shareholders suffer from double taxation. A joint stock company is created by law and is supervised by legal authority. So, a joint stock company can easily win the public confidence. Higher Profits. With the help of larger capital and technical skill, the cost of production is reduced, which increases the rate of profit. Disadvantages of Joint Stock Company Advantages of Joint Stock Company. The owners or shareholders cannot take part in the management of the company. The company is managed by board of directors elected by shareholders. The directors hire experienced and qualified personnel for efficient management. The efficient management may help the company to take rational decisions and can produce better results for the company.

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