joint-stock company

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Joint Stock Company

A company that issues stock and requires shareholders to be held liable for the company's debt. In other words, a joint stock company combines features of a general partnership, in which owners of a company split profits and liabilities, and a publicly-traded company, which issues stock that shareholders are able to buy and sell on an exchange. See also: Publicly-traded partnership.

joint-stock company

A rare type of business organization characterized by some features of a partnership and some features of a corporation. Shares are transferrable and the company is assessed taxes according to corporate tax rates. However, the liability of each owner is unlimited. Joint-stock companies are established primarily because of the ease with which they are formed.

joint-stock company

a form of company in which a number of people contribute funds to finance a FIRM in return for SHARES in the company Joint-stock companies are able to raise funds by issuing shares to large numbers of SHAREHOLDERS and thus are able to raise more capital to finance their operations than could a SOLE PROPRIETOR or even a PARTNERSHIP. Once a joint-stock company is formed then it becomes a separate legal entity apart from its shareholders, able to enter into contracts with suppliers and customers. Joint-stock companies are managed by the BOARD OF DIRECTORS appointed by shareholders. The directors must report on the progress of the company to the shareholders at an ANNUAL GENERAL MEETING where shareholders can in principle vote to remove existing directors if they are dissatisfied with their performance.

The development of joint-stock companies was given a considerable boost by the introduction of the principle of LIMITED LIABILITY which limited the maximum loss which a shareholder was liable for in the event of company failure. This protection for shareholders encouraged many more of them to invest in companies.

There are two main forms of joint-stock company:

  1. private limited company. Under UK Company Law the maximum number of shareholders in a private company is limited to 50 and the shares issued by the company cannot be bought and sold on the STOCK EXCHANGE. Such companies carry the term limited (Ltd) after their name;
  2. public limited company. Under UK Company Law there must be a minimum of seven shareholders in a public company, but otherwise a company can have an unlimited number of shareholders. Shares in a public company can be bought and sold on the stock exchange and so can be bought by the general public. Such companies carry the term public limited company (plc) after their name.

Most big firms are public companies since this is the only practical way of obtaining access to large amounts of capital. Although the shareholders are the owners of a public company, very often it is the company's management which in fact controls its affairs. See FLOTATION, SHARE ISSUE.

joint-stock company

A form of company in which a number of people contribute funds to finance a FIRM in return for SHARES in the company. Joint-stock companies are able to raise funds by issuing shares to large numbers of SHAREHOLDERS and thus are able to raise more capital to finance their operations than could a sole proprietor or even a partnership. Once a
References in periodicals archive ?
The results of a trial expert evaluation on intellectual capital factors influencing value added in joint-stock companies
The discrepancies of intellectual capital factors influencing value added in joint-stock companies lead to the necessity to conduct a trial expert evaluation.
What is more academic relationship is important and joint-stock companies have to work with distinguished universities and research institutes.
Instead, the revised law is expected to encourage existing agricultural production entities to convert themselves into joint-stock companies.
Operating income of the joint-stock companies had increased by NOK88bn to NOK2,348bn in 2001, while operating profit had decreased from NO224bn to NOK209bn.
The joint-stock companies, put up for the auction, include enterprises specializing in cotton growing, poultry farming, agriculture, transport, construction, repair, trade, production, processing and others.
The joint-stock companies, put up for the auction, include enterprises specializing in poultry farming, agriculture, transport, construction, repair, trade, production, processing and others.
Tuesday's session saw shares of 32 out of a total 81 electronically-registered joint-stock companies exchanging hands with 15 down, 8 up and nine retaining their previous figures.
A working group of the Financial System Council, an advisory panel to the finance minister, compiled a package of proposals Wednesday for the smooth conversion of life insurance houses from mutual companies into joint-stock companies.
The package includes permission for life insurers to distribute cash, instead of stock certificates, to holders of small policies and issue new shares upon their conversion into joint-stock companies.
Monday's session saw shares of 35 out of a total 81 electronically-registered joint-stock companies exchanging hands with 10 down, 17 up and eight retaining their previous figures.