What is meant by Joint Stock Company? Explain the merits of Joint Stock Company?
What is meant by Joint Stock Company? Explain the merits of Joint Stock Company?
Two or more individuals or enterprises, either private or government, owned or a foreign company joining together through participation in equity capital for achieving a common target and mutual benefits is known as joint stock company.
Merits of Joint Stock Companies are:
(i) Reduces competition : When two companies join together, it results in reducing the competition as instead of wasting resources in competition they will strengthen their organization.
(ii) Reduces risk : High risk involved in new and innovative ventures can be reduced when two companies join together to share the risk.
(iii) Advanced technology : By joining hands with foreign companies, Indian companies can get the benefit of advanced technology.
Two or more individuals or enterprises, either private or government, owned or a foreign company joining together through participation in equity capital for achieving a common target and mutual benefits is known as joint stock company.
Merits of Joint Stock Companies are:
(i) Reduces competition : When two companies join together, it results in reducing the competition as instead of wasting resources in competition they will strengthen their organization.
(ii) Reduces risk : High risk involved in new and innovative ventures can be reduced when two companies join together to share the risk.
(iii) Advanced technology : By joining hands with foreign companies, Indian companies can get the benefit of advanced technology.
