Joint stock company: essence and types

A joint-stock company (JSC) is a form of company or joint venture involving two or more individuals that own shares of stock in the business. Certificates of ownership ("shares") are issued by the corporation in return for each financial contribution, and the shareholders are free to relocate their ownership interest at any time by selling their shares to others.

 

At present, company law the existence of a joint-stock company is often identical with incorporation (i.e. possession of authorized personality separate from shareholders) and limited liability (meaning that the shareholders are only liable for the company's debts to the value of the money they invested in the company). And as an outcome joint-stock company is generally known as corporations or limited companies.

 

Some jurisdictions still provide the opportunity of registering joint-stock companies without limited liability. In the United Kingdom and other countries which have adopted their form of company law, these are known as unlimited companies. In the United States they are, to some extent confusingly known as joint-stock companies. (Company means a company formed and registered under this act or an existing company. – Company Act 1994)

 

1. Chartered Company: The companies that form by the order of the king of England are called the charter company. These companies were formed before 1844. For example, East India Company, Chartered Bank of England, the charter of the British South Africa Company, given by Queen Victoria (More information here)

 

2. Statutory Company: Companies that are formed by the order of the President, or by the Legislative Committee or by bill of Parliament are called Statutory Company. These Companies are operated by those laws. For example, municipal councils, universities, central banks and government regulators, Central Bank. (More information here)

 

3. Registered Corporation: Companies that are formed under the prevailing law of the company are called the registered company. The corporation that has filed a registration statement with the SEC prior to releasing a new stock issue. It is two types-

 

i) Unlimited Company: The liabilities of the shareholders of this company are unlimited. For example, British all-terrain vehicle manufacturer Land Rover, GlaxoSmithKline Services Unlimited.

 

ii) Limited Company / limited corporation: The liabilities of the shareholders are limited. For example, Charitableorganisations, Financial Services Authority. This liability of a company can be of two types.

 

a) By Guarantee

 

b) By share value. The company limited by share can be of two types.

 

• Private Limited Company, where the number of shareholder ranges from two to fifty. The share of these companies can’t be traded in the stock market.

 

• Public Limited Company, where the number of shareholder ranges from seven to share limitation. The share of the public limited company is traded in the stock market.

 

Capital (funds): essense and types

Capital is the resources used in creation goods and services in the long term. It has two types: physical and monetary. Physical capital is the machinery, equipment and buildings used in production. Each type of enterprise has funds to organize and make goods or services. The funds are divided to production funds and circulation funds. Production funds consist of production (production means such as machine tools, computers, working tables and others) funds and non-production funds (accommodation, sanatorium, health centre and others). Production funds have direct relation to the production process, but non-production funds also important part of the funds as they influence to labour productivity at the enterprise. Monetary capital is pecuniary expression of non-financial assets and money in cash. The process of the continuous circulation is called turnover of the capital and it expresses through the formula

Fixed (main) capital and variable capital

It refers to any kind of real or physical capital(fixed asset) that is not used up in the production of a product. It contrasts with circulating capital such as raw materials, operating expenses and the like.

So fixed capital is that portion of the total capital outlay that is invested in fixed assets (such as land, buildings, vehicles, plant and equipment), that stay in the business almost permanently - or at the very least, for more than one accounting period. Fixed assets can be purchased by a business, in which case the business owns them. They can also be leased, hired or rented, if that is cheaper or more convenient, or if owning the fixed asset is practically impossible (for legal or technical reasons).

Constant capital contrasts with variable capital, v, the cost incurred in hiring labor power. The higher value of output, compared to input costs, is (other things being equal) attributable to the exploitation of living labor-power only. Variable capital is "variable" because its value changes (varies) within the production process. A misapplication of labour, or the devaluation of types of labour activity by the market can mean the loss of part of the capital invested, or all of it.