![]() The company organisation, therefore, is like a bridge between the skill and capital.ĩ. Thus, the available skill is utilized for the benefit of the company. Normally, experienced persons are elected as directors. Professional Management- The management of a company vests in the directors duly elected by shareholders. ![]() The shares of most joint stock companies are listed on the stock exchange and hence can be easily sold.Ĩ. Transferability of Shares- The shareholders of a public company are entitled to transfer the shares held by them to others. This creates confidence in the public about the functioning of the company.ħ. Their accounts are audited by a chartered accountant and are to be published. The provisions regarding compulsory publication of some documents, accounts, director’s report, etc., create confidence in public. Public Confidence- Formation and working of companies are well regulated by the provisions of the Companies Act. Scope for Expansion- As there is no restriction to the maximum number of members in a public company, expansion of business is easy by issuing new shares and debentures.Ħ. These economies would provide goods to the consumer at a cheaper price.ĥ. Economies of Scale- Since the company operates on a large scale, it would result in the realisation of economies in purchases, management, distribution or selling. As an incorporated body, a company enjoys perpetual existence.Ĥ. Stability of Existence- The organisation of a company as a separate legal entity gives it a character of permanence or continuity. The private property of shareholder is not attachable to recover the dues of the company.ģ. It has a stimulating effect on investment. ![]() ![]() Limited Liability- Liability of the shareholders of a company is limited to the face value of the shares they have purchased. The joint stock company by its widespread appeal to investors of all classes can raise adequate resources of capital required by large-scale enterprise.Ģ. Larger Capital- The huge capital required by modern enterprises would not be possible under other forms of organisations like sole individual proprietorship and even in partnership. Joint Stock Company: Advantages and Disadvantages Joint Stock Company – Advantages and Disadvantages Advantages of Joint Stock Company:ġ. Separation between Ownership and Management 16. Lack of Motivation and Personal Touch 14. Undue Speculation in the Shares of the Company 9. ![]()
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