Joint Stock Companies Quiz

A business entity where ownership is divided into shares of stock, and the capital is raised by issuing these shares to investors.

1. Limited Liability: Shareholders are not personally responsible for the company's debts beyond their invested capital. 2. Capital Formation: Easier to raise large amounts of capital by issuing shares. 3. Transferability of Shares: Shares can be bought and sold, providing liquidity for investors. 4. Professional Management: Allows for the hiring of professional managers to run the company.

1. Complexity and Cost: Setting up and maintaining a Joint Stock Company can be complex and costly. 2. Loss of Control: Shareholders may have limited control over company decisions due to dispersed ownership. 3. Conflict of Interest: Interests of shareholders and management might not always align.

<p>Shareholders are not personally responsible for the company's debts beyond their invested capital.</p> Signup and view all the answers

<p>It is easier to raise large amounts of capital by issuing shares.</p> Signup and view all the answers