Bissoy.com
Doctors Medicines MCQs Q&A

Justify the following statement:

The ownership and management are separated in Joint Stock Company.

4 views

1 Answers

  • A Joint Stock Company is a voluntary association of individuals for profit, having its capital divided into transferable shares, the ownership of which is the condition of membership.
  • The members of a joint-stock company are many and they are scattered all over.
  • It becomes very difficult for them to manage the business of the company.
  • Lots of time may be wasted as all the shareholders are not able to come together at one place at the same time and as a result, there is a delay in decision making.
  • To avoid these problems, the shareholders elect their representatives known as “Board of Directors”.
  • The Board of Directors handles the business of the company on behalf of the shareholders.
  • But, all important decisions pertaining to the company are not taken without the consent of all the shareholders.
  • The owners of the company are the shareholders.
  • The managers of the company are the Board of Directors.
  • So, there is a separation of ownership and management in Joint Stock Company.
  • Thus, the ownership and management are separated in Joint Stock Company.

4 views

Related Questions