Question

explain three merits or two demerits of joint stock company​

Answer 1

Answer:

Joint stock company has demerits of difficult legal formalities. It is difficult to establish and run. It has to follow difficult legal formalities in comparison to sole trading and partnership firm. The legal formality also cost some amount of money.

Explanation:

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Answer 2

Explanation:

1. Separate legal entity

2. Abundant Capital

3. More Managerial efficiency

4. Optimum utilization of resources

5. Limited liability of the shareholders

The demerits of a joint stock company are:

1. Delay in decision due to legal formalities

2. High incorporation cost

3. Lengthy process for formation as well as dissolution

4. Loss of communication or chances of grapevine due to such a long communication chain.