Chapter List. The definition of Joint Stock Company lies between the definition of partnership and co-orporation.

A joint stock Company is a business organization where the stock of the company are bought and owned by the shareholders jointly. But unlike ordinary shares or preferred shares, the shares of a joint stock company carry explicit obligations. According to W. Artificial person : a joint stock company is an artificial person and enjoys the facility of natural person in certain aspects. Separate legal entity : Being an artificial person, a joint stock company has its own separate existence independent of its members.

It means that a joint stock company can own property, enter into contracts and conduct any lawful business in its own name. Perpetual existence : A joint stock company continues to exist as long as it fulfills the requirements of law.

It is not affected by the death, lunacy, insolvency or retirement of any of its members. Limited liability : The liability of shareholders of the company is limited up to their capital investment.

Freely transferable shares: the shares of the joint stock company are easily transferable from one person to another without prior permission Joint Stock Company Class 11 company. Democratic management : Joint stock companies have democratic management and control. That is, even though the shareholders are owners of the company, all of them cannot participate in the management of the company.

The definition of Joint Stock Company lies between the definition of partnership and corporation. The company can borrow loan for expansion and diversification of business or purchase goods on credit during regular business.

Perpetual Existence : A company is an artificial legal person created by law which has its own independent legal status. Its existence is not affected by the death or insolvency of its members.

Transferability of shares : the shares of the joint stock company are easily transferable from one person to another without prior permission from company. Such transfer of shares does Isle Of Skye Apartment Company affect the regular function of the company.

Large-scale production : Due to the availability of large financial resources and technical expertise it is possible for the companies to have large-scale production. Contribution to society : A joint stock company offers employment to a large number of people. It facilitates promotion of various ancillary industries, trade and auxiliaries to trade. Sometimes it also donates money towards education, health and community services. Divided risk : there are many shareholders in a joint stock company who buys shares of the company.

So the risk of the company is divided among the shareholders. Memorandum of association : it shows the relation of the company with others and contains information such as capital, liability of the members and the objective of the company. Articles of Association : it is the written document of rules and regulations to achieve the objectives defined by the Memorandum of Association. The Memorandum of Association sets the objective of the organization.

After that, rules and regulations are to be set to achieve the objectives. Thus, the Article of Association is the document, which contains the rules and regulations. It consists of the regulations and by-laws for governing the internal affairs of the company.

The contents in the Article of Association should not contradict with the contents of Company Act and Memorandum. The Article of Association defines what is to be done to achieve the objectives of the company. According to company Act,the following particulars should be included in the Articles of Association:. Prospectus : The registration of a company is to be followed by the capital raising procedure. To raise capital for the company, shares and debentures are issued.

Thus, prospectus is the document created to issue public notice, circular or advertisement to invite public for the purchase of the securities of Zoodles Noodles And Company company.

The prospectus also includes general information about the company, previous and projected income statement and balance sheet. The prospectus should be signed and dated by the promoters of the company. According to the company Act, a prospectus should contain the following matters:.

Provisions, if any, regarding reservation of shares for any shareholder, employee or other persons. It defines all the rules and regulations of the company. It provides information of capital, liabilities of shareholders, nature of business and other external rules and regulation. The memorandum contains the fundamental conditions upon which alone the company is allowed to be incorporated.

Certain criterions are to be fulfilled to create a company name. They are: the name should not be identical with other company in the country, use of undesirable words is prohibited. Situation or domicile clause: This clause of the Memorandum of Association contains the name and place of the company and shows the place where the registered office of the company is located. This is Open A Car Rental Company as all the legal and important documents are kept in the registered office.

It defines the scope of the company. A company is established with its own set of certain objectives. This clause allows them to do the activities allowed by the government.

Thus this clause contains information about the objectives of the company. Liabilities clause : The liabilities clause talks about the liability the shareholders. It states that the liability of every member is limited to the face value of his or her shares. Capital clause : The capital clause mentions the total amount of authorized share capital. The different types of shares to be issued along with their face Joint Stock Company Class 11 are stated in this clause.

Association or subscription clause: The promoters of the company sign in the memorandum for the formation of the company in this clause. It mentions the names and addresses of subscribers. The subscribers express their consent in forming the company by agreeing to buy the necessary shares for becoming the subscribers of the company. In private company at least one subscriber should be present whereas public company requires 7. The registration of a company is to be followed by the capital raising procedure.

The shareholders are the true owner of the company. They take major decisions during the meeting. According to Company Act,shareholders meeting are classified into the following three types:. Preliminary general meeting is the first general meeting of shareholders after the establishment of the company. The main purpose of such meeting is to provide information about the prospects of the company to its members.

This meeting approves the clause mentioned in the prospectus. According to the Company Act,the Preliminary general meeting should be held within one year after the date of receiving certificate of commencement of business. The members are provided with each and every information of the company such as share allotted, cash received, expenditures, properties and so on.

A written notice along with venue, date and time of meeting is to be sent to all the members before 21 days and a statutory report signed by at least 1 director must be sent to all shareholders. A preliminary report should contain all of the following information:.

The shareholders meeting organized every fiscal year are known as annual general meeting. According to the Company Act,the annual general meeting is to be held within the six months after the completion of fiscal year.

This meeting aims to update shareholders about the performance of the company. It provides information about the future plans and programs of the company. Note of such meeting is given 21 days before mentioning the date, time and venue of the meeting. For a public company, publishing information about the meeting in a national newspaper is a must. Special or extraordinary meeting is conducted for important and urgent subjects that were not presented in previous annual general meeting.

This type of meeting is called when urgent decisions are to be made regarding important matters. Notice is circulated to the shareholders mentioning the date, time and venue 15 days before the meeting.

Resolution simply can be defined as formal decision arrived through voting. An organization is always needs decisions to carry out business in a systematic manner.

Before any decisions are selected, possible proposals are put forward in a meeting where the members arrive at a particular decision as the ultimate one. Thus, a proposal when put forward in a meeting is passed it becomes a resolution. Resolutions which are presented in every board meeting or annual general meeting and can be decided through simple majority are known as ordinary resolutions.

General activities such as declaration of dividend, appointment of director and auditor, presentation of audited profit Airlift Company loss account of previous year and so on require an ordinary resolution. Resolutions which are presented for special issues and can be only decided through special majority i.

Special resolution is decided as per the clauses mentioned in the Memorandum and Article of Association of the company. They are passed in annual general meetings or special general meetings.

Examples of special resolutions include: issue of bonus shares, increase and decrease in capital, changing the name and address of the company and so on. Under the Company act,Joint Stock Company can be incorporated in the following steps:. The following details and information are to be attached along with the application:. The registration fee is prescribed by the office of registrar through Nepal Gazette.

The amount of registration fees depends upon the level of authorized capital of the business. A private company can start to function after it receives the certificate of incorporation however a public company should wait for the letter of commencement. Obtaining certificate of commencement of business: A private company can start to function after Dlx Company receives the certificate of incorporation however a public company should wait for the letter of commencement.

The registrar then goes through the document and if satisfied provides the certificate of commencement of business. After this, the public limited company can start its transaction and issue prospectus for the sale of shares and debentures.

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