What is a joint stock company? Every time you turn your head while in your populated town all you read is the word company (Co) labeled on the buildings, cars, posters etc. Have you ever thought how joint stock companies are managed?

So, what is a joint stock company? You want to tell me it is an association of persons who come together for a specific purpose. Well, I don't dispute this... but what about the statutory definition? Let me define it for you, right? Statutorily, a joint stock company is an association of persons who are registered under the Companies Act. This definition doesn't sound complete to bring a clear elaborate meaning that satisfies you. Okay, let me elaborate it by not using the statutory approach...

A joint stock company is either a voluntary association or organization of persons who have contributed money or money's worth to a common stock. These persons employ this money or monies in some business or trade and thereafter share either the profits or losses from such a trade or business. Got it, right!

Let us consider the definition given by Haney, "A joint stock company is an incorporated association, which is an artificial person created by law, having a separate entity, with a perpetual succession and a common seal." You can now conclude from these definitions that the persons who contribute the money and money's worth are the members of that company. These money and money's worth contributed by people is what is referred to as the company's capital. What the company does is that it divides its capital into a fixed value of shares.

The members of the joint stock company are entitled a share which actually represents their money and money's worth. Through these shares, the members possess the ultimate control of the company. Here is how you exercise the controlling power of the joint stock company as a member:

1.) You can install new directors.

2.) You can remove existing directors.

3.) You can amend the memorandum of association.

4.) You can amend the article of association.

5.) Lastly, in any general meeting, the directors cannot act without your approval in certain cases.

There are many types of companies which are classified on the following basis:

On the Basis of Nationality

1.) Domestic.

2.) Foreign.

On the Basis of Incorporation or Registration

1.) Chartered.

2.) Statutory.

3.) Registered.

On the Basis of Ownership

1.) Government.

2.) Non government.

On the Basis of Liability

1.) Limited by shares.

2.) Limited by guarantee.

3.) Unlimited.

On the Basis of Control

1.) Holding.

2.) Subsidiary.

On the Basis of Members

1.) Private.

2.) Public.

Author's Bio: 

The author of this article is Joshua Nyamache and together with other team members they are working on Nikenya website, a website that you connect with friends and read articles about doing more work in less time, nurturing entrepreneurial spirit, achieving dreams and many more articles that give you informative information.