Sunday, 5 June 2011

Kinds of Joint stock company

Following are the important kinds of joint stock company :

1. Chartered Company.
2. Statutory Company.
3. Registered Company.

A company which is created by the Royal order is called chartered company. Its powers, rights and functions are governed by the charter. In the present age this type of company is not liked by the people. Now all the companies are registered.

Examples :- ( i ) East India Company. ( ii ) Chartered Bank of England. ( iii ) Reserve Bank of India.

A company which is formed by the order of Governor General, President or Prime Minister or by the Special act of parliament is called statutory company. These companies are organized for the object of social welfare business. Government provides full protection to these companies. These companies have a monopoly in their business. The share holders have a limited liability.

Examples :- ( i ) State Bank of Pakistan. ( ii ) National Bank of Pakistan. ( iii ) Industrial Development Corporation of Pakistan.

Those companies which are formed under the companies ordinance 1984 are called registered companies. Registered company has separate entity from its members.

Examples :- ( i ) Colony Textile Mills Limited. ( ii ) Adam jee Industries Limited.

Registered company has following kinds :

1. Unlimited Company.
2. Company Limited by Shares.
3. Company Limited by guarantee.

The shareholders of the unlimited company are liable to pay the debts and other obligations of the business. So the liability of the members is unlimited.

Features :- ( i ) It has separate legal entity. ( ii ) Its share can be transferred easily. ( iii ) It is managed by the board of directors.( vi ) It is registered under the companies ordinance.

In this company the liability of each member is limited to the amount of the shares which he holds. It has two kinds :
( i ) Private limited company. ( ii ) Public limited company.

Private limited company :- It can be formed at least by two persons but total membership can not exceed than fifty. Neither it can issue the shares nor it can transfer the shares. Company also uses the word limited with its name. Liability of the share holders is also limited.

Public limited company :- At least seven members can form the public limited company but there is no limit to the maximum member. Company can sell the shares to the public. The shares can easily transferred. It can issue the debentures to borrow the capital.

In this company each member gives a guarantee to contribute a specified amount on its winding up. So liability of the shareholders is limited to that guarantee which they have given. These type of companies are mostly formed for Clubs to promote social welfare activities.

Association Not for Profit :-
This type of association enjoys all the benefits of a limited company without using the word Limited. These are formed for the promotion of commerce and religion etc.


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