accounting

ACCOUNTS OF JOINT STOCK COMPANIES
INTRODUCTION:
A Joint Stock Company is a type of business organisation which is formed under Companies Ordinance 1984, whose capital is contributed by members who are accorded the privilege of limited jability. This means that they are liable for the debts of the company to the extent of the shareholding that they have contributed. Beyond that sum they are not liable for the company's debts. The Joint Stock Company is the only practicable way of collecting the vast sum of capital required for the complex industrial projects of the modern world.
DEFINITION OF A JOINT STOCK COMPANY:
A joint stock company may be defined as an artificial person recognized by law, with a distinctive name, a common seal, a common capital comprising transferable snares carrying limited liability and having a perpetual succession.
The main characteristics of a company which distinguish it from other forms of organizations are as iws:
CHARACTERISTICS OF A JOINT STOCK COMPANY: I. SEPARATE LEGAL ENTITY:
A-joint stock company is the creation of law. It has a separate legal entity of its own which is recognized by law as distinct from the persons forming it. The company enjoys many of the rights of catural person. For example, it can use or be used in its name. It can own and transfer the title to property.
Z. FINANCING;
A joint stock company is an effective organization for raising a large amount of capital. It issues prospectus and invites people to purchase the shares of the company. The persons who purchase shares ine part owners of the company with liability limited to the value of the shares they have purchased.
PERPETUAL EXISTENCE:
A joint stock company has a long life compared to other forms of business organizations. When rompany is formed and commences business, it has then a continuous life. The shareholder can withdraw tie capital by selling shares in the market. The company can, however, be winded up through compliance *ith the provisions of Companies Ordinance 1984.
4. LIMITED LIABILITY:
The liability of each shareholder of the company is limited only to the extent of the face value of the •iares he holds or any part thereof which is unpaid