What is Joint Stock Company?

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dbello | High School Teacher | (Level 1) Educator

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A Joint Stock Company combines aspects of a 'corporation' and those of a 'partnership'. It is important to understand the differences between the two, in order to understand what was at stake. Corporations have the advantage of 'limited liability', the shareholders of the corporation are legally separate from the corporation. In other words, those who own shares are not held legally responsible for the performance of the stock. Partnerships have 'unlimited liability' which legally translated means those who lose on their investment in your company can go after your personal accounts.  A Joint Stock Company would sell 'shares of stock' in the company. Behaving as a corporation a Joint Stock Company sells ownership of the company. The more shares one owned, the more ownership one had in the company. Shares can be bought and sold depending upon demand. However, the owners of Joint Stock Companies were held liable for the performance of the company, a characteristic of a partnership. In economic words, a very high risk on both accounts.

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beagle9700 | Student | (Level 2) eNoter

Posted on

A Joint Stock company is a business with ownership that is campaned by a little bit of custody of a stock.

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