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A joint stock company is a unique entity that resembles a corporation and a partnership, having features of both. Like a corporation, a joint stock company is made up of shareholders. Under the umbrella of a joint stock company, all shareholders have unlimited liability, yet the company’s stock is fully transferable. The capital of a joint stock company is pooled into a common fund formed by individual shareholder contributions. The shareholders of a joint stock company are free to sell or transfer their shares without requiring the permission or consent of other shareholders. A joint stock company is managed by an elected Board of Directors on behalf of the shareholders. It is unusual for a shareholder to sit on the board of a joint stock company. The first joint stock company was established in 1602 as the Dutch East India Company. Jamestown was also financed by a joint stock company. While many joint stock companies still exist, they are considered an unpopular alternative to limited liability entities. The joint stock company business form has been attributed to a number of fraudulent asset protection schemes. |
