assemblage of individuals formed to start and operate a business organization. A joint stock company generally shares the same characteristics as a corporation, but it does not provide limited liability, and in many states it lacks formal and official authorization. Once popular because of the ease of formation under the common law, joint stock companies are not seen as much today because it has become easier to form limited liability corporations under state authorization.
form of business organization that combines features of a corporation and a partnership. Under U.S. law, joint stock companies are recognized as corporations, but with unlimited liability for their stockholders.
form of business organization that combines features of a corporation and a partnership. Under U.S. law, joint stock companies are recognized as corporations with unlimited liability for their stockholders. As in a conventional corporation, investors in joint stock companies receive shares of stock they are free to sell at will without ending the corporation; they also elect directors. Unlike in a limited liability corporation, however, each shareholder in a joint stock company is legally liable for all debts of the company.
There are some advantages to this form of organization compared with limited-liability corporations: fewer taxes, greater ease of formation under the common law, more security for creditors, mobility, and freedom from regulation, for example. However, the disadvantages- such as the fact that the joint stock company usually cannot hold title to real estate and, particularly, the company’s unlimited liability-tend to outweigh the advantages, with the result that it is not a popular form of organization.