Joint Stock Company formation and features

JSC formation and features

1. Joint Stock Company -Formation and its Features Presented By : Aravindreddy M 18951A0582

2. "Joint stock company is a form of organization which is capable of mobilizing larger amount of capital with provision of limited liability for owners and affording professional management to conduct its business“ Meaning of Joint Stock Company :

3. Joint Stock Company Chartered co mpany R e gis t e r ed co mpany L imited by promise L imited by share Public Limited P rivate Limited Statutory co mpany

4. Formation of Joint Stock Company : Joint Stock Company Promotion Registration Capital Subscription Commencement Of Business

5. Promoters : Some people join together with the aim to start a company and are called Promoters. They act as the first directors to formulate the company. The promoters collect all the information needed for the formation, promotion and financial requirement of the business. Promoters also prepare the important documents required for the formation of the company. Promoters also follow up the process to get the certificate of Incorporation. In case of Public companies , Promoters take the required steps to pool the share capital.

6. Necessary Documents required for the formation of Joint Stock Company: Memorandum of Association Article of Association Prospectus For Registration

7. Memorandum of Association: Aim and Objectives of the company Different types of shares Ways of Subscription The memorandum of association should contain : Articles of Association: The Articles of association should contains the rules and regulations of the administration of the company.

8. Registration : For Public companies, a name has to be chosen which should not be identical to any existing company. The promoters then need to submit the requisition letter along with all the necessary documents and prescribed fees to the register. The requisition letter should contain : =>Proposed name of the company =>Name and Address of first seven directors. =>Consent to act as a first Directors =>Two Witnesses All the requisition letters should be signed by first seven directors and counter signature by Chartered accountant or Practicing Supreme Court Advocate

9. Capital Subscription: Once the directors receive the certificate of incorporation , they issue the prospectus(brochure) to the public which results in start of capital subscriptions of the company . Private companies cannot issue prospectus and however in place of prospectus they submit statements to the registrar.

10. A public limited company cannot commence business just by raising capital. In order to start a business a public limited company should get a certificate called the certificate to commence the business from registrar. Commencement of business:

11. A) An artificial person The company enjoys all the rights as a citizen of a country would enjoy. It 'can own properties, enter into contracts. B) Separate legal entity The company is separate from the persons who own it . The company cannot be held responsible for any misdeeds of the members. Features of Joint Stock Company

12. C) Large capital A Joint Stock Company can generate huge amount of money towards capital, because the number of persons contributing towards capital are more in number when compared to Sole Proprietorship or Partnership organization . D) Common seal The company, being an artificial being, cannot affix its signature on the documents on its own. The common seal is used in place of a signature

13. E) Legal formation The formation of a Joint Stock Company is governed by the rules and regulations laid down in the Companies Act, 1956. F) Transferability of shares The shares of a Joint Stock Company are easily transferable from one person to another, since it is a Public Limited Company

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