What Are The Advantages And Disadvantages Of Joint Stock Company?
The advantages:- Large financial resources: A joint stock company is able to collect a large amount of capital through contributions from a large number of people. In a public limited company, shares can be offered to the general public to raise capital. The companies can also accept deposits from the public and issue debentures to raise funds. Limited liability: In case of a joint stock company, the liability of it’s members is limited to the value of shares held by them. Private property of members cannot be confiscated for overcoming the debts of the company. This advantage attracts many people to invest their savings in the company and it encourages the company to take more risks. Professional management: Management of a company is in the hands of the directors, who are elected democratically by the members or shareholders. These directors are known as the “Board of Directors”. They manage the affairs of the company and are accountable to all the investors. So, the investors elect
