JOINT STOCK COMPANY
An association engaged in a business for profit
with ownership interests represented by shares of
stock.
A joint stock company is financed with cap-
ital invested by the members or stockholders
who receive transferable shares, or stock. It is
under the control of certain selected managers
called directors.
A joint stock company is a form of partner-
ship, possessing the element of personal liability
where each member remains financially respon-
sible for the acts of the company. It is not a legal
entity separate from its stockholders.
A joint stock company differs from a part-
nership in that the latter is composed of a
few persons brought together by shared confi-
dence. Partners are not free to retire from the
firm or to substitute other persons in their
place without prior assent of all the partners.
A partner’s death causes the dissolution of the
firm.
In contrast, a joint stock company consists of
a large number of stockholders who are unac-
quainted with each other. A change in member-
ship or a transfer of stock has no effect on the
continued existence of the company and the
death of a stockholder does not result in its dis-
solution. Unlike partners in a partnership, a
stockholder in a joint stock company has no
agency relationship to the company or any of its
members.
A joint stock company is similar to a corpo-
ration in that both are characterized by perpet-
ual succession where a member is allowed to
