Joint Stock Company does not suffer from limitations of capital and management

Que: Joint Stock Company does not suffer from limitations of capital and management. Justify.

Answer:

A joint-stock company sells the shares, debentures, and bonds on large scale. So, a joint-stock company can collect a large amount of capital.

As the number of members is not restricted, it is easy to raise a huge amount of capital for a joint-stock company.

A company has better chances of obtaining finance and credit facility as it enjoys better public confidence and reputation in the market.

Since the directors of companies are elected by the shareholders, they will elect efficient people who will manage the business affairs in an efficient manner.

These directors are generally experienced and qualified in the business field. This increases the efficiency of the company.


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