The join stock company is an organisation consisting of persons who contribute money and other factors needed to run the organisation's business.
■ Limited liability.
There is limited liability. This principle encourages those who are afraid of risk or those who do not have business experience to take part in business by simply buying shares in companies.■ Legal Entity.
A company is separate being in law. This means that once a company is formed, it becomes a legal Entity distinct from its shareholders. It can use, enter into contracts, employ labour own assets and can be sued.
■ Directors are elected by shareholders
The shareholders meet in their annual general meeting to elect members of Board of Directors. It is in this meeting that they can vote to maintain or reject the existing managers of the company.
■ Number of shareholders.
In the past, the private limited company was limited to a minimum of two(2) and a maximum of fifty(50) shareholders but today there is no upper limit. For public limited company, it ranges from seven to infinitive. This means there is no upper limit of shareholders in both private and public companies.
■ The prospect of continuity.
The existence of the Joint stock company is independent of the life and fortunes of its shareholders. When a shareholder dies, his successor takes over his shares. A shareholder can also sell his shares if he is no more interested in the company or the company can float the shares of the dead shareholder in the financial market.
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