Joint Stock Company – Merits and Demerits

Joint Stock company

A Joint Stock company is formed to gain profits by a group of people under the act in which capital is not transferable and the shareholders carry limited liabilities. Any individual can file a case against a company and vice-versa. A company carries an under which it runs; its business and its entity is permanent.

Definition

Section 2 (20) of the Companies Act, 2013 defines a Company very precisely as follows

Company méans a Company incorporated under this Act or under any previous Company Law.

According to Prof. Haney

A joint-stock company is an artificial person created by law having a separate entity with a perpetual succession and a common seal.

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Joint Stock Company as an Artificial Person

A Joint Stock Company is said to be an Artificial Person create by law, having a separate entity with a perpetual succession and a Common Seat.

Brief History

It is assumed that the company came into existence in the 12th century in Italy and in the 16th century in England. In India first of all the East India Company was established in 1600 A.D. In our country Indian Compånies Act was introduced in 1913 for the first time and then in 1956 amended companies act was passed but pow companies are established and dissolved under the Companies Act 2013.

Meaning of a Joint Stock company

A Joint Stock company is formed to gain profits by a group of people under the act in which the capital is not transferable and the shareholders carry limited liabilities. Any individual can file a case against a company and vice-versa. A company carries an under which it runs; its business and its entity is permanent.Read More »Joint Stock Company as an Artificial Person

Registration of Firms

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Prior to the year 1932, there was no arrangement for the registration of firms in India. But after the enforcement of the Partnership Act, 1932, provisions for registration of firms were made. But for partnership firms, registration was made voluntary and not compulsory, or registration of the firm is dependent on the will of the partners. Nonregistration of the firm creates a number of difficulties. Therefore registration of the firm is very beneficial.Read More »Registration of Firms

Rights of Partner in a Partnership Firm

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Rights of PartnerA partnership is a voluntary organization of two or more persons who agree to earn profits from a lawful business and share it among themselves. The persons who participate in this business are individually called ‘Partners’ and cumulatively called a ‘Firm’. The name in which the business is carried on is called ‘the name of the firm’.

The partner who has invested more in partnership business and directly involves in business activities is called an active partner. The partners who have invested money but involve in business activity is called sleeping partner. The partner who has invested money but nominated as a partner is called a nominal partner. The partner who is retired from the business but investment is not written is called quasi-partner.

A partnership firm is different from a Sole Proprietorship in terms of the rights of a partner.

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Partnership : Definition and Its Characteristics

Introduction and Meaning

Business Partnership

 

Partnership is the mutual relationship between two or more persons, who make a contract to share profits and losses among themselves from the exercises of a specific business. In other words, when two or more persons agree to carry on a business for mutual profits, it is said that they have formed a partnership.

The rights of a partner in a partnership firm are different from the counterpart of a sole proprietorship firm.

One man’s business is best in the world if that one man is big enough to manage everything.

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Sole Proprietorship : Demerits and Limitations

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Definition of Sole Proprietorship

Sole Proprietorship definition according to Prof Hynes

Sole Proprietorship is that form of business which has a single owner, who has the total responsibility of the business, who runs the business and also bears the risk on the failure of business.

Despite high mortality, the sole entrepreneur survives.

In the words of Dr. John A Shubin

Under the Sole Trader-ship Business, a single man is an organizer; he is the owner and runs the business by his own name.

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Proprietorship Advantages, Merits and Importance

Proprietor

One man’s business is best in the world if that one man is big enough to manage everything.

Meaning of Sole Proprietorship

Sole trader-ship (proprietorship) is that form of business organization whose owner is just one person, who is called the sole trader. This person invests capital in the business and is solely responsible for all the profits and losses of the business. The same person is the manager and organizer of the business.

Advantages, Merits, and Importance

Following are the merits (or importance) of the sole proprietorship system
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Proprietorship : Definition and Its Characteristics

Introduction to Sole Proprietorship

Sole Proprietorship

Sole trader-ship or proprietorship is the oldest form of business in all the countries of the world. Along with the progress of the business, its form has also been changing. But due to its simplicity, quick formation, and easiness, this form is the most popular and in practice in the world.

One man’s business is best in the world if that one man is big enough to manage everything.

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