A joint-stock company is a business entity in which different stocks can be bought and owned by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares certificates of ownership. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company. In modern-day corporate lawthe existence of a joint-stock company is often synonymous with incorporation possession of legal personality separate from shareholders and limited liability shareholders are liable for the company's debts only to the value of the money they invested in the company.

Therefore, joint-stock companies are commonly known as corporations or limited companies. Some jurisdictions still provide the possibility of registering joint-stock companies without limited liability. In the United Kingdom and other countries that have adopted its model of company law, they are known as unlimited companies. In the United Statesthey are known simply as joint-stock companies. Ownership of stock refers to a large number of privileges.

The company is managed on behalf of the shareholders by a board of directorselected at an annual general meeting. The shareholders also vote to accept or reject an annual report and audited set of accounts. Individual shareholders can sometimes stand for directorships within the company if a vacancy occurs, but that is uncommon. The shareholders are usually liable for any of the company debts that extend beyond the company's ability to pay.

Meanwhile, the limit of their liability extends only to the face value of their shareholding. The concept of limited liability largely accounts for the success of this form of business organization. Ordinary shares entitle the owner to a share in the company's net profit. It is calculated in the following way: An individual's share of the profit is thus the dividend multiplied by the number of shares owned.

Finding the earliest joint-stock company is a matter of definition. The earliest records of joint stock company can be found in China during the Song Dynasty — In more recent history, the earliest joint-stock company recognized in England was the Company of Merchant Adventurers to New Landschartered in with shareholders.

Muscovy Companywhich had a monopoly on trade between Moscow and Londonwas chartered soon after in The much more famous, wealthy and powerful English later British East India Company was granted an English Royal Charter by Elizabeth I on December 31,with the intention of favouring trade privileges in India.

The Royal Charter effectively gave the newly created Honourable East India Company a year monopoly on all trade in the East Indies.

Soon afterwards, inthe Dutch East India Company issued shares that were made tradable on the Amsterdam Stock Exchange. That invention enhanced the ability of joint-stock companies to attract capital from investors, as they could now easily dispose their shares. Init became the first 'corporation' in intercontinental trade with 'locked in' capital and limited liability. During the period of colonialismEuropeans, initially the British, trading with the Near East for goods, pepper and calico for example, enjoyed spreading the risk of trade over multiple sea voyages.

The joint-stock company became a more viable financial structure than previous guilds or state-regulated companies. The first joint-stock companies to be implemented in the Americas were The London Company and The Plymouth Company. Transferable shares often earned positive returns on equity, which is evidenced by investment in companies like the British East India Companywhich used the financing model to manage trade in India.

Joint-stock companies paid out divisions dividends to their shareholders by dividing up the profits of the voyage in the proportion of shares held. Divisions were usually cash, but when working capital was low and detrimental to the survival of the company, divisions were either postponed or paid out in remaining cargo, which could be sold by shareholders for profit.

However, in general, incorporation was possible by royal charter or private actand it was limited because of the government's jealous protection of the privileges and advantages thereby granted. As a result of the rapid expansion of capital-intensive enterprises in the course of the Industrial Revolution in Britain, many businesses came to be operated as unincorporated associations or extended partnershipswith large numbers of members.

Nevertheless, membership of such associations was usually for a short term so their nature was constantly changing. Consequently, registration and incorporation of companies, without specific legislation, was introduced by the Joint Stock Companies Act Initially, companies incorporated under this Act did not have limited liability, but it became common for companies to include a limited liability clause in their internal rules.

In the case of Hallett v Dowdallthe English Court of the Exchequer held that such clauses bound people who have notice of them. Four years later, the Joint Stock Companies Act provided for limited liability for all joint-stock companies provided, among other things, that they included the word "limited" in their company name.

The existence of a corporation requires a special legal framework and body of law that specifically grants the corporation legal personality, and it typically views a corporation as a fictional person, a legal person, or a moral person as opposed to a natural person which shields its owners shareholders from "corporate" losses or liabilities; losses are limited to the number of shares owned.

It furthermore creates an inducement to new investors marketable stocks and future stock issuance. Corporate statutes typically empower corporations to own property, sign binding contracts, and pay taxes in a capacity separate from that of its shareholders, who are sometimes referred to as "members". The corporation is also empowered to borrow money, both conventionally and directly to the public, by issuing interest-bearing bonds. Corporations subsist indefinitely; "death" comes only by absorption takeover or bankruptcy.

According to Lord Chancellor Haldane. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.

This 'directing will' is embodied in a corporate Board of Directors. The legal personality has two economic implications.

It grants creditors as opposed to shareholders or employees priority over the corporate assets upon liquidation. Second, corporate assets cannot be withdrawn by its shareholders, and assets of the firm cannot be taken by personal creditors of its shareholders. The second feature requires special legislation and a special legal framework, as it cannot be reproduced via standard contract law.

The regulations most favorable to incorporation include:. In many jurisdictions, corporations whose shareholders benefit from limited liability are required to publish annual financial statements and other data so that creditors who do business with the corporation are able to assess the credit-worthiness of the corporation and cannot enforce claims against shareholders.

That requirement generally applies in Europe, but not in common law jurisdictions, except for publicly traded corporations for which financial disclosure is required for investor protection. In many countries, corporate profits are taxed at a corporate tax rate, and dividends paid to shareholders are taxed at a separate rate. Such a system is sometimes referred to as " double taxation " because any profits distributed to shareholders will eventually be taxed twice.

One solution, followed by as in the case of the Australian and UK tax systems, is for the recipient of the dividend to be entitled to a tax credit to address the fact that the profits represented by the dividend have already been taxed.

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The company profit being passed on is thus effectively taxed only at the rate of tax paid by the eventual recipient of the dividend.

In other systems, dividends are taxed at a lower rate than other income for example, in the USor shareholders are taxed directly on the corporation's profits, with dividends are not taxed for example, S corporations in the US. The institution most often referenced by the word "corporation" is publicly tradedwhich means that the company's shares are traded on a public stock exchange for example, the New York Stock Exchange or Nasdaq in the United States whose shares of stock of corporations are bought and sold by and to the general public.

Most of the largest businesses in the world are publicly traded corporations. However, the majority of corporations are privately heldor closely held, so there is no ready market for the trading of shares. Many such corporations are owned and managed by a small group of businesspeople or companies, but the size of such a corporation can be as vast as the largest public corporations.

Closely held corporations have some advantages over publicly traded corporations. A small, closely held company can often make company-changing decisions much more rapidly than a publicly traded company, as there will generally be fewer voting shareholders, and the shareholders would have common interests. A publicly traded company is also at the mercy of the market, with capital flow in and out based not only on what the company is doing but also on what the market and even what the competitors, major and minor, are doing.

However, publicly traded companies also have advantages over their closely held counterparts. Publicly traded companies often have more working capital and can delegate debt throughout all shareholders. Therefore, shareholders of publicly traded company will each take a much smaller hit to their returns as opposed to those involved with a data entry work from home jobs durban held corporation.

Publicly traded companies, however, can suffer from that advantage. A closely held corporation can often voluntarily take a hit to profit with little to no repercussions if it is not a sustained loss. A publicly traded company often comes under extreme scrutiny if profit and growth are not evident to stock holders, how to cheat in deer hunter 2016 iphone stock holders may sell, further damaging the company.

Often, that blow is enough to make a small forexpros cambio divisas company fail. Often, communities benefit from a closely held company more so than from a public company.

A closely held company is far more likely to stay in a single place that has treated it well even if that means going through hard times. Shareholders can incur some of the damage the company may receive from a bad year or slow period in the company profits. Closely held companies often have a better relationship with workers. In larger, publicly traded companies, often after only one bad year, the first area to feel the effects is the workforce with layoffs or worker hours, wages or benefits being cut.

Again, in a closely held business the shareholders can incur the profit damage rather than passing it to the workers. The affairs of publicly traded and closely held corporations are similar in many respects. The main difference in most countries is that publicly traded corporations have the burden of complying with additional securities laws, which especially in the US may require additional periodic disclosure with more stringent requirementsstricter corporate governance standards as well as additional procedural obligations in connection with major corporate transactions for example, mergers or events for example, elections of directors.

A closely held corporation may be a subsidiary of another corporation its parent companywhich may itself be either a closely held or a public corporation.

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In some jurisdictions, the subsidiary of a listed public corporation is also defined as a public corporation for example, in Australia. In Australia corporations are registered and regulated by the Commonwealth Government through the Australian Securities and Investments Commission. Corporations law has been largely codified in the Corporations Act In Brazil there are many different types of legal entities "sociedades"but the two most common ones commercially speaking are i sociedade limitadaidentified by "Ltda.

In Canada both the federal government and the provinces have corporate status, and thus salle seforex corporation may have a provincial or a bollinger bands volatility indicator charter.

Many older corporations in Canada stem from Acts of Parliament passed before the introduction of general corporation law. The oldest corporation in Canada is the Hudson's Bay Company ; though its business has always been based in Canada, its Royal Charter was issued in England by King Charles II inand became a Canadian charter by amendment in when it moved its corporate headquarters from London to Canada.

Federally recognized corporations are regulated by the Canada Business Corporations Act. GermanyAustriaSwitzerland and Liechtenstein recognize two forms of company limited by shares: Italy recognizes three types of company limited by shares: The latter is a hybrid of the limited partnership and public limited company, having two categories of shareholders, some with and some without limited liability, and is rarely used in practice.

Non-profit corporations may be established under the Civil Code. In Norway a joint-stock company is called an aksjeselskapabbreviated AS. A special and by far less common form of joint-stock companies, intended for companies with a large number of shareholders, is the publicly traded joint-stock companies, called allmennaksjeselskap and abbreviated ASA.

A joint-stock company must be incorporated, has an independent legal personality and limited liability, and is required to have a certain capital upon incorporation. Ordinary joint-stock companies must have a minimum capital of NOK 30, upon incorporation, which was reduced fromin Publicly traded joint-stock companies must have a minimum capital of NOK 1 support and resistance charts forex. Open joint-stock company OJSC.

In Spain there are two types of companies with limited liability: Jam buka forex hari minggu are two types of Joint stock companies Aktsionerne Tovaristvo; Ukr.

Public Joint-stock company Publichne Aktsionerne Tovaristvo; Ukr. Minimum amount of share capital is minimum wages as of Ukraine National Securities and Stock Market Commission is the main stock market state authority. In the United Kingdom'corporation' most commonly refers oldest stock still traded a body corporate formed by Royal Charter or by statute, of which few now remain.

The BBC is the oldest and best known corporation within the UK that is still in existence. Others, such as the British Steel Corporationwere privatized in the s. In the private sector, corporations forex trading course currency system-strategy ( magic wave ) referred to as companies, and are regulated by the Companies Act or the Northern Ireland equivalent.

The most common type of the stock market guide to profitable investing download pdf is the private limited company "Limited" or "Ltd".

Private limited companies can either be limited by shares or by guarantee. Other corporate forms include the public limited company "PLC" and the private unlimited company. A special type of corporation is a corporation solewhich is an office held by an individual natural person the incumbentbut which has a continuing legal entity separate from that person.

Several types of conventional corporations exist in the United States. Generically, any business entity that is recognized as distinct from the people who own it i. A corporation was defined in the Dartmouth College case ofin which Chief Justice Marshall of the United States Supreme Court stated that " A corporation is an artificial being, invisible, intangible, and existing only in contemplation of the law".

A corporation is a legal entity, distinct and separate from the individuals who create and operate it.

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As a legal entity the corporation can acquire, own, and dispose of property in its own name like buildings, land and equipment. It can also incur liabilities and enter into contracts like franchising and leasing. American corporations can be either profit-making companies or non-profit entities.

In some states, such as Colorado, a corporation may represent itself pro se in courts of law in some situations [11]. The federal government can only create corporate entities pursuant to relevant powers in the U.

Thus, virtually all corporations in the U. A major exception to the federal nonparticipation in the incorporation of private businesses is in banking ; under the National Bank Actbanks may bernanke put option charters from the federal government as " national banks ," subjecting them to the regulation of the federal Office of the Comptroller of the Currency rather than state banking regulators.

All states have some kind of "general corporation law" California, Delaware, Kansas, Nevada and Ohio actually use that exact name which authorizes the formation of private corporations without having to obtain a charter for each one from the state legislature as was formerly the case in the 19th century.

Many states have separate, self-contained laws authorizing the formation and operation of certain specific types of corporations that are wholly independent of the state general corporation law. For example, in California, nonprofit corporations are incorporated under the Nonprofit Corporation Law, and in Illinois, insurers are incorporated under the Illinois Insurance Code.

Corporations are created by filing the requisite documents with a particular state government. Only certain corporations, including banks, are chartered. Others simply file their articles of incorporation with the state government as part of a registration process. Once incorporated, a corporation has artificial personhood everywhere it may operate, until such time as the corporation may be dissolved.

A corporation is legally a citizen of the state or other jurisdiction in which it is incorporated except when circumstances direct the corporation be classified as a citizen of the state in which it has its head office, or the state in which it does the majority of its business. Corporate business law differs dramatically from state to state. Many prospective corporations choose to incorporate in a state whose laws are most favorable to its business interests.

Many large corporations are incorporated in Delawarefor example, without being physically located there because that state has very favorable corporate tax and disclosure laws. Companies set up for privacy or asset protection often incorporate in Nevadawhich does not require disclosure of share ownership.

Many states, particularly smaller ones, have modeled their corporate statutes after the Model Business Corporation Actone of many model sets of law prepared and published by the American Bar Association. As juristic personscorporations have certain rights that attach to natural persons. The vast majority of them attach to corporations under state law, especially the law of the state in which the company is incorporated — since the corporations very existence is predicated on the laws of that state.

A few rights also attach by federal constitutional and statutory law, but they are few and far between compared to the rights of natural persons. For example, a corporation has the personal right to bring a lawsuit as well as the capacity to be sued and, like a natural person, a corporation can be libeled.

Harvard Collegean undergraduate school of Harvard Universityformally the President and Fellows of Harvard College also known as the Harvard Corporationis the oldest corporation in the western hemisphere. Significantly, Massachusetts itself was a corporate colony at that time — owned and operated by the Massachusetts Bay Company until it lost its charter in - so Harvard College is a corporation created by a corporation.

Many nations have modeled their own corporate laws on American business law. Corporate law in Saudi Arabiafor example, follows the model of New York State corporate law. In addition to typical corporations in the United States, the federal government, in passed the Alaska Native Claims Settlement Act ANCSAwhich authorized the creation of 12 regional native corporations for Alaska Natives and over village corporations that were entitled to a settlement of land and cash.

In addition to the 12 regional corporations, the legislation permitted a 13th regional corporation without a land settlement for those Alaska Natives living out of the State of Alaska at the time of passage of ANCSA. Almost every recognized type of organization carries out some economic activities for example, the family.

Other organizations that may carry out activities that are generally considered to be business exist under the laws of various countries:. From Wikipedia, the free encyclopedia.

This article is part of a series on Corporate law By jurisdiction. Anguilla Australia BVI Canada Cayman Islands India South Africa United States Vietnam European Union France Germany United Kingdom. Company Conglomerate Cooperative Corporation Holding company Joint-stock Partnership General Limited Limited liability Private limited Sole proprietorship. Corporate forms by jurisdiction. Business judgment rule Corporate governance De facto and estoppel corporations Internal affairs doctrine Limited liability Piercing the corporate veil Rochdale Principles Ultra vires.

Civil procedure Contract Corporate registers. United Kingdom company law. United States corporate law and Delaware corporation. Types of business entity. The Law of Private Companies 2nd ed. West's Encyclopedia of American Law. Retrieved 4 May The Anglo-Dutch Rivalry for the East India Trade". The Journal of Political Economy.

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By jurisdiction Anguilla Australia BVI Canada Cayman Islands India South Africa United States Vietnam European Union France Germany United Kingdom. General corporate forms Company Conglomerate Cooperative Corporation Holding company Joint-stock Partnership General Limited Limited liability Private limited Sole proprietorship.

Doctrines Business judgment rule Corporate governance De facto and estoppel corporations Internal affairs doctrine Limited liability Piercing the corporate veil Rochdale Principles Ultra vires. Related areas Civil procedure Contract Corporate registers. Company portal Law portal. Unlike a partnership or sole proprietorshipshareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations.

That enables corporations to "socialize their costs" for the primary benefit of shareholders; to socialize a cost is to spread it to society in general.

Without limited liability, a creditor would probably not allow any share to be sold to a buyer at least as credit-worthy as the seller. Limited liability further allows corporations to raise large amounts of finance for their enterprises by combining funds from many owners of stock.

Limited liability reduces the amount that a shareholder can lose in a company. That increases the attraction to potential shareholders and so increases both the number of willing shareholders and the amount they are likely to invest. However, some jurisdictions also permit another type of corporation in which shareholders' liability is unlimited, for example the unlimited liability corporation in two provinces of Canada, and the unlimited company in the United Kingdom.

Another advantage is that the assets and structure of the corporation may continue beyond the lifetimes of its shareholders and bondholders. That allows stability and the accumulation of capital, which is thus available for investment in larger and longer-lasting projects than if the corporate assets were subject to dissolution and distribution.

That was also important in medieval times, when land donated to the Church a corporation would not generate the feudal fees that a lord could claim upon a landholder's death: However a corporation can be dissolved by a government authority by putting an end to its existence as a legal entity.

That rarely happens unless the company breaks the law, for example, fails to meet annual filing requirements or, in certain circumstances, if the company requests dissolution. This article needs additional or better citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. March Learn how and when to remove this template message.

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