Cooperative Society & Joint Stock Company

o FACILITY OF FORMATION o DEMOCRATIC MANAGEMENT o LIMITED LIABILITY o SCOPE FOR INTERNAL FINANCING o CONTINUITY o TAX CONCESSIONS o CO-ORDINATION o STATE ASSISTANCE

 LIMITATION OF CAPITAL  EXCESSIVE STATE REGULATION  INEFFICIENCY OF MANAGEMENT  INTRIGUE AND BICKERING AMONG MEMBERS

The companies in India are governed by the INDIAN COMPANIES ACT, 1956. The Act defines a company as an artificial person created by law. Thus, a Joint Stock Company is a voluntary association of persons having a separate LEGAL EXISTENCE, PERPETUAL SUCCESSION and a COMMON SEAL which is established by law and can be dissolved only by law.

The Joint Stock Company is an artificial person created for carrying on some business by an association of persons. According to Marshall, C.I., “A corporation is an artificial being, invisible and existing only in contemplation of the law. Being a mere creation of law, it possesses only the properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. A company may be defined as an artificial person (being an association of natural persons), recognized by law, with a distinctive name, a common seal, a common capital comprising transferable shares of fixed value carrying limited liability and having a perpetual (continuous uninterrupted) succession.

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LEGAL FORMATION

• SEPARATE LEGAL ENTITY • ARTIFICIAL PERSON • COMMON SEAL • PERPETUAL SUCCESSION • LIMITED LIABILITY • DEMOCRATIC MANAGEMENT • TRANSFERABILITY OF SHARES •

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