Podcast
Questions and Answers
What is a Joint Stock Company?
What is a Joint Stock Company?
A business entity where ownership is divided into shares of stock, and the capital is raised by issuing these shares to investors.
What are the advantages of a Joint Stock Company?
What are the advantages of a Joint Stock Company?
- 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.
What are the disadvantages of a Joint Stock Company?
What are the disadvantages of a Joint Stock Company?
- 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.
Why is limited liability an advantage of a Joint Stock Company?
Why is limited liability an advantage of a Joint Stock Company?
How does a Joint Stock Company ease capital formation?
How does a Joint Stock Company ease capital formation?
Flashcards
Joint Stock Company
Joint Stock Company
A business where ownership is split into shares, and funds are raised from investors.
Limited Liability
Limited Liability
Shareholders are only liable up to the amount they invested.
Capital Formation
Capital Formation
Raising funds by selling shares to investors.
Share Transferability
Share Transferability
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Professional Management
Professional Management
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