When you think of powerful companies, sole proprietorships and partnerships typically aren’t the first thing to come to your mind.
Instead, joint stock companies should be the ones coming right up to your mind, as they are the largest companies in existence.
A large-scale business owned by several different individuals is referred to as a joint stock company.
What it actually is?
The most straightforward explanation company is that it is a type of business organization in which multiple shareholders share equal ownership.
Which means that everyone who is a shareholder in the company owns a certain amount of the stock in the business.
By representing the number of shares that they hold in the company, and the shareholders can either buy more shares or sell the ones they already own
What are these shares?
Shares are a component of publicly traded companies and any joint stock company that exists on its own.
These shares are traded on a registered exchange by companies organized as cooperative stock corporations.
The shares in joint stock companies require the holders to vote directly in the company’s management decisions.
How to start?
After understanding what a joint stock company is, the next step is to point out that the shares in these organizations are accompanied by several responsibilities compared to ordinary or preferred shares.
Which do not involve any obligations, this contrasts with the lack of commitments involved in ordinary or preferred shares. Beside this, the holders can participate in managing the company’s outstanding debts.
Features of joint stock company?
A joint stock company is an individual legal entity, apart from the persons involved. It can own assets, and can because it is an entity.
So, it can sue or be sued. Whereas a partnership or a sole proprietor, it has no such legal existence apart from the person involved in it.
Which makes the company members are not liable to the company and are not dependent on each other for business activities.
A company’s shareholders, without consulting, can transfer their shares to others. Whereas, in a partnership firm, a partner cannot move his share without any approval from other partners.
The liability of the company’s shareholders is limited. However, no member can liquidate the personal assets to pay a firm’s debts.
There can be an unlimited number of members for a public limited company, but the minimum is seven. Only two members and a partnership firm cannot have more than 10 members in one business for a private limited company.
In simple joint stock companies, shareholders’ contributions are not strictly protected and may be returned if they are not needed to run the business or pay off its debts.
What makes a joint stock company simple?
- Structure of the property and shares
- Paying for shares with contributions
- Putting a price on contributions
- Management of a company
Types of joint stock companies
- A Public Joint Stock Company (PJSC)
It is an organization whose capital is divided into negotiable shares of equal value.
A partner therein shall be liable only to the extent of his stake in the company’s capital.
PJSCs are required to have an equal number of partners, and each partner’s liability shall be limited to the amount of his share in the company’s capital.
- Limited Stock Company
These type of companies does not have a board of directors but is managed instead by its manager or board of managers
Which company to choose?
One of the most specialized businesses in economic studies is Truth UAE. The company has always played an essential part in sculpting the economic landscape and providing projects
that represent real opportunities for investment in both the UAE and the GCC. Not only that they offer brilliant business consolations, but they are considered in the top of the game when it comes to joint stock companies.
As they lay out a detailed analysis of the project’s economic viability. Creating a draught of the company’s articles of association and memorandum of association is currently being worked on.
Along with, putting together a presentation that will be given to the chairman of the founders’ committee, to explain any further details regarding the company’s plan.