Joint Stock Company
The emergence of joint stock company has been possible because of financial and operational deficiencies of the sole trading business and partnership firm. Primarily company form of organization has been developed to overcome the difficulties of the traditional forms of business organization and to make effective and fullest utilizations of the new developments. In common sense, the word company denotes an association of persons united for a common objective. A joint stock company is a voluntary association of persons with a common seal and perpetual succession formed to carry on business for profit.
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According to Marshall a company denotes “a person artificial, invisible, intangible and existing only in the eyes of law. Being a creation confers upon it either expressly or as incidentally to its very existence.”
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The growth of joint stock company as a form of business organization has emerged due to the limitations of sole trader and partnership form of business organization. The growth of company form of organization was slow and gradual and its significance has increased because of the demerits of the above two forms of business organization. The growth of joint stock company in India is not natural but taken its growth from English people. Companies were first established in England under the royal charter of the crown. The examples of companies formed under the charter of the crowns are the East India company, the Bank of England and the Hudson Bay company. But now-a-days the growth of joint stock company is much larger and it contributes substantially for the national and world economy.