A joint stock company is a business entity where ownership is divided into shares of stock, and shareholders have limited liability for the company's debts and obligations.
Joint stock companies raise capital by issuing shares of stock to investors, who become partial owners of the company and share in its profits and losses. Shareholders elect a board of directors to oversee corporate affairs and make strategic decisions on behalf of the company. Joint stock companies offer advantages such as access to capital, limited liability protection, and flexibility in ownership transfer through buying and selling shares in the stock market.
They are commonly used for large-scale enterprises requiring significant capital investment and diversification of ownership. Understanding joint stock companies is essential for investors, entrepreneurs, and stakeholders participating in corporate governance, equity markets, and capital formation activities.