Question

Write short note on merits of Joint stock company.

Answer 1

A joint-stock company is a company in which investors can buy and sell shares of the company's stock.

The merits of a joint stock company include -

• Joint stock company includes the mobilisation of huge financial resources.
• A joint stock company has limited liability
• There is an ease of transfer of the ownership in a joint stock company  
• A joint stock company enjoys a perpetual and stable business life
• There are enormous possibilities of growth and an expansion.
• Efficient management is always conducted under a joint stock company.
• The public has a greater confidence in a joint stock company.
• A joint stock company provides vatious positive social benefits.

Answer 2

Merits of Joint Stock Company are  :

• A large amount of capital can be raised.
• It has reached to the 'general public' for raising capital (if publicly listed).
• It has limited liability.

• In the proceeding of default/bankruptcy, the maximum amount the company would lose would be the company's assets.
• Members (shareholders) of the 'company will not be required to pay' anything out of their pockets. Their liability is restricted to what they had before keeping money into the company.

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