Banking financial institution, depository institution: Financial institution that accept deposit and channel the money into lending activities is called depository institution. Bank: Central Bank Commercial Bank Development Bank Finance Company Microfinance Cooperatives Non banking financial institution, Contractual institution Employee Provident Fund Citizen investment trust Insurance companies Investment institution Brokers Investment bank underwriters
A modern
business requires huge capital and expert management professional to run it
effectively and efficiently. Sole proprietorship and partnership business could
not meet the requirement of large scale organization. Both of them have limited
fund and unlimited liability. There is lack of management ability in sole
trading and partnership firm. It is not possible to manage and control them
efficiently. So, Joint Stock Company is established. A Joint Stock Company is
an association of many persons who invest capital to carry on comparatively
large scale business and share profit and losses with limited liabilities of
their capital investment.
Simply, Joint
Stock Company refers to the independent or
voluntary association of individuals which is established for generating
revenue. it is an artificial person created by law having common seal and
perpetual succession. The required capital to operate the business is collected
by promoters and general public. Who are known as shareholders. The capital of
the company is divided into large number of units which are known as shares. A
company issues shares to the general people to raise the fund. The liability of
the shareholders is limited. The company is managed and controlled by the Board
Of Director(BOD). BOD is elected by the shareholders in an annual general
meeting through voting procedures in Nepal. It is established under Nepal
company act 2063 in Nepal.
Character of joint stock company
a)
An
artificial person
b)
Separate
legal entity
c)
Perpetual
secession
d)
Limited
liability
e)
Common
seal
f)
Capital
divided in separate
g)
Public
of final statement
h)
Transfer
of share
i)
Democratic
management
Advantage of joint stock company
a)
Huge
amount of capital
b)
Limited
liability
c)
Perpetual
existence
d)
Transferability
of share
e)
Effective
management
f)
Public
faith
g)
Democratic
management
h)
Diffusion
of risk
i)
Social
important
Disadvantage of Joint Stock Company
a)
Difficult
in formatting
b)
separation
of ownership and management
c)
Possible
of fraudulent management
d)
Lack
of secure
e)
Lack
of prompt decision
f)
Conflict
of interest
g)
Excessive
regulating
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