Definition of Joint Stock Company. The liability of shareholders of a company is limited to the face value of shares held. What is the importance of joint stock company? The capital of a French simplified joint-stock company is divided into shares, with no minimum capital required (art. Importance The importance of a joint stock company is that it allows for the from USH 101 at Princeton University 1 .Limited Liability. In this article we will discuss about the Need and Methods required for Valuation of Shares. Brief notes on different Types of joint stock companies Short essay on joint stock companies What are the Advantages … A simplified joint-stock company is managed by a President (Chairman) who represents the company vis-à-vis third parties. We need you to answer this question! These companies had proven profitable in the past with trading ventures. The joint-stock company was the forerunner of the modern corporation. This chapter examines the development of the joint stock company and the first statute on companies. A Joint Stock Company may be defined as a company that issues stock and allows derived promotion trading making the stockholders legally responsible for the debts caused to the company. Each stockholder owns corporation stock in proportion, evidenced by their divisions such as documents of ownership. Since Joint Stock Companies have large financial resources, they are able to undertake large scale production, satisfy needs of more number of consumers, create large scale employment opportunities, promote balanced regional development and contribute substantially … A joint-stock company is a commercial enterprise in which divisions of the company's assets can be purchased and sold by stockholders. Incorporated association: A company is called an incorporated association because it comes into existence only after registration. ADVERTISEMENTS: A careful analysis of the above mentioned definitions reveal the following important characteristic feature of a Joint Stock Company. One of the earliest joint-stock companies was the Virginia Company, founded in 1606 to colonize North America. The London Company and the Plymouth Company. Related posts: What advantages does a joint stock company enjoy over other forms of business organization? The share of big companies in government revenue far exceeds the combined tax contributions of sole proprietorships and partnerships. They are personally liable for the debts of the company. The framework of the joint stock company was only obtainable by specific statute or royal charter and was a cumbersome and expensive process, best suited to major projects. Such reform includes the creation of the Simplified Joint Stock Company (Sociedad por Acciones Simplificada) (SAS), which provides various benefits same as will be explained later. The risk was small, and the returns were fairly quick. Social Importance . Need for Valuation of Shares: In most cases, shares are quoted on the stock exchange; and for ordinary transactions in shares or debentures or Government securities, the price prevailing on the stock exchange may be taken as the proper value. We need you to answer this question! 5.Public confidence . By law, individual shareholders were not responsible for actions undertaken by the company, and, in terms of risk exposure, shareholders could lose only the amount of their initial investment. Civil law in the bourgeois states regards the joint-stock company as an association having these features: the recognition of its juridical status as an individual, material liability exclusively limited to the property belonging to it, and the subdivision of its capital into shares. The joint-stock company in civil law. A company is an important and growing source of revenue to the government insofar as it has to pay tax on every rupee of its profit. In a joint-stock venture, stock was sold to high net-worth investors who provided capital and had limited risk. L.227-1 al. The first Act introduced was the Joint Stock Company Regulation and Registration Act 1844. See also corporation. Joint-Stock Company. A Joint Stock Company is a combination of a partnership and a corporation. Economic development: Joint stock company system has been responsible for the rapid growth of industries and trade in many countries. 3 of the Commercial code). 6.Professional management . The important characteristics of a Joint Stock Company are as follows: 1. Importance of the joint stock company… James I charted in on April 10, 1606 as a joint stock company with the Virginia Company of London and the Virginia Company of Plymouth, a.k.a. However, it is important to highlight that this type of company seek specific purposes, and has special features to be taken into consideration, prior to its recommendation. What is the importance of joint stock company?