Archive | Business Studies

After the receipt of certificate of incorporation, if the promoters of a public limited company wishes to issue shares to the public, he will issue a document called prospectus.

The process of conceiving an idea of starting a company and developing it into a concrete reality through incorporation is called promotion.

Joint stock company can be classified into different kinds from different angles and considerations.

The rights and obligations of the partners are described in the partnership deed. In the absence of a bonafide partnership deed, the provisions of the Partnership Act with regard to rights and obligations will apply.

Partnership comes into existence by an agreement between two or more persons called partners.

A joint stock company is a body corporate with a common seal and perpetual succession owned by a large number of persons known as shareholders who contribute capital to the company and it is being managed by the board of directors elected by the shareholders.

The emergence of joint stock company has been possible because of financial and operational deficiencies of the sole trading business and partnership firm.

Limited partnership is a type of partnership where at least one partner is a general partner whose liability is unlimited and others have limited liability.

The Distinguish between Partnership and Sole-Trade Business are:

The following are the disadvantages of Partnership:

Partnership form of organisation is suitable for medium size business where personal efforts of entrepreneurs are essential. The following are the advantages of partnership:

The formation of partnership requires an understanding among the partners in the form of an agreement because partnership arises not from status but from contract.

Under-capitalization refers to a state of insufficiency of capital. The state of under capitalization emerge from under-estimate of capital needs of the promoter and failure to provide necessary current finance by borrowings.

Over-capitalization refers to a state where the amount of shares issued by the company is more than the required amount.

Debenture is a written document bearing the seal of the company and which acknowledges a debt.

Giving recognition to the company in the eye of the law is termed as incorporation. A joint stock company enjoys the status of legal entity when it is incorporated.