Business Strategy: Joint Stock Company

Large Capital Intensive Companies require to establish by Law

Joint Stock Company

It is form of Business Organization require high capital and manpower, therefore the company to be enacted and dissolve under law. In India it is formulated by Indian Companies Act 1956,form of business organization is a voluntary association of person contribute towards capitals. Under Joint stock company principle high capital and risk are being managed well. The members of company appoints by investment to company, although even if member die the company will exist.The member invest in form of there shares and collectively called share capital. Therefore the members are share holders of company.

Features of Joint Stock Company

• Legal formation – governs under the law
  
• Artificial person – regulated by law, does not require physical attributes
• Separate legal entity – Share holders are not owner of property of company
• Limited liability – depends upon share invested
• Perpetual existence – company exists as long it fulfills the requirement of law
• Democratic management – management elections to be undertaken

Advantages

Joint Stock Company have inclusion of large capital, limited liabilities , large scale production and distribution , generate large employment and service to social sector well.

Disadvantages 

Difficult to Form , bind by the government acts and regulation, require high capital intensive professionals, concentration of economic powers in hands of few people.

Therefore the Joint Stock Company suits for Large capital intensive business operations process like manufacturing, iron and steel, pharmaceutical, fertilizer etc

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