Write short notes on the following. Features of Joint Stock company.

ANSWER:

Features of a joint stock company:

i. Artificial person: Unlike human beings, a company, as an artificial person, cannot sign its documents and negotiate with its customers.

ii. Separate legal entity: It implies that the company is created as a separate legal entity by law and is a juristic person.

iii. Perpetual succession: A company is a separate legal entity that cannot come to an end by itself. It continues to operate even if all of its members die.

iv. Limited liability: The shareholders of a company enjoy limited liability to the amount of capital invested by them in the business.

v. Common seal: The board of directors uses the common seal as an official signature of the company to validate official documents.

vi. Risk bearing: The risks are shared jointly by the shareholders. It reduces the burden on a single shareholder.