A joint-stock company is a
business entity in which shares of the company's
stock
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
can be bought and sold by
shareholder
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
s. Each shareholder owns company stock in proportion, evidenced by their
shares
In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...
(certificates of ownership). Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.
In modern-day
corporate law, the existence of a joint-stock company is often synonymous with
incorporation
Incorporation may refer to:
* Incorporation (business), the creation of a corporation
* Incorporation of a place, creation of municipal corporation such as a city or county
* Incorporation (academic), awarding a degree based on the student having ...
(possession of
legal personality
Legal capacity is a quality denoting either the legal aptitude of a person to have rights and liabilities (in this sense also called transaction capacity), or altogether the personhood itself in regard to an entity other than a natural pers ...
separate from shareholders) and
limited liability (shareholders are liable for the company's debts only to the value of the money they have invested in the company). Therefore, joint-stock companies are commonly known as
corporation
A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
s or
limited companies.
Some
jurisdiction
Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels.
Ju ...
s still provide the possibility of registering joint-stock companies without limited liability. In the
United Kingdom and in other countries that have adopted its model of company law, they are known as
unlimited companies. In the
United States, they are known simply as joint-stock companies. A joint-stock company is an artificial person; it has legal existence separate from persons composing it. It can sue and can be sued in its own name. It is created by law, established for commercial purposes, and comprises a large number of members. The shares of each member can be purchased, sold, and transferred without the consent of other members. Its capital is divided into transferable shares, suitable for large undertakings.
Advantages
Ownership refers to a large number of privileges. The company is managed on behalf of the shareholders by a board of directors, elected at an annual general meeting.
The shareholders also vote to accept or reject an annual report and audited set of accounts. Individual shareholders can sometimes stand for directorships within the company if a vacancy occurs, but that is uncommon.
A joint-stock company also differs from other company forms, as it lacks internal ownership (hence its shareholders). This means that although the shareholder(s) in the joint-stock company may also work for the company as employees or by contract, when they act as shareholders they are always exterior to the company, which may help keep ownership business-oriented and impersonal.
Provided sales and assets exist within the company, a joint-stock company is effectively a forum for three- party trading: Owners, i.e. shareholders, are seeking financial funds (profits) and offer economic assets, in the form of capital. Employees, contractors and other contracted parties seek compensation and offer labor for this. Utilisers, ie customers, clients and other stakeholders, seek products and services, and offer financial funds for this.
The shareholders are usually not liable for any of the company debts that extend beyond the company's ability to pay up to the amount of them.
Early joint-stock companies
China
The earliest records of joint-stock companies appear in China during the
Tang and
Song dynasties. The Tang dynasty saw the development of the ''heben'', the earliest form of joint stock company with an active partner and one or two passive investors. By the Song dynasty this had expanded into the ''douniu'', a large pool of shareholders with management in the hands of ''jingshang'', merchants who operated their businesses using investors' funds, with investor compensation based on profit-sharing, reducing the risk of individual merchants and burdens of interest payment.
Europe
Finding the earliest joint-stock company is a matter of definition. An early form of joint-stock company was the medieval
commenda, although it was usually employed for a single commercial expedition. Around 1350 in
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan ar ...
at
Toulouse, 96 shares of the ''Société des Moulins du Bazacle'', or
Bazacle Milling Company were traded at a value that depended on the profitability of the mills the society owned, making it probably the first company of its kind in history. The
Swedish
Swedish or ' may refer to:
Anything from or related to Sweden, a country in Northern Europe. Or, specifically:
* Swedish language, a North Germanic language spoken primarily in Sweden and Finland
** Swedish alphabet, the official alphabet used by ...
company
Stora has documented a stock transfer for an eighth of the company (or more specifically, the mountain in which the
copper
Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pinkish ...
resource was available) as early as 1288.
In more recent history, the earliest joint-stock company recognized in
England
England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...
was the
Company of Merchant Adventurers to New Lands, founded in 1551 with 240 shareholders. It became the
Muscovy Company
The Muscovy Company (also called the Russia Company or the Muscovy Trading Company russian: Московская компания, Moskovskaya kompaniya) was an English trading company chartered in 1555. It was the first major chartered joint ...
, which had a monopoly on trade between
Russia
Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-eigh ...
and
England
England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...
, when
royal charter was granted in 1555. The most notable joint-stock company from the
British Isles
The British Isles are a group of islands in the North Atlantic Ocean off the north-western coast of continental Europe, consisting of the islands of Great Britain, Ireland, the Isle of Man, the Inner and Outer Hebrides, the Northern Isles (O ...
was the
East India Company
The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Sout ...
, which was granted a
royal charter by
Queen Elizabeth I on December 31, 1600 with the intention of establishing trade on the
Indian subcontinent. The charter effectively granted the newly formed ''Honourable East India Company'' a fifteen-year
monopoly on all English trade in the
East Indies
The East Indies (or simply the Indies), is a term used in historical narratives of the Age of Discovery. The Indies refers to various lands in the East or the Eastern hemisphere, particularly the islands and mainlands found in and aroun ...
.
Soon afterwards, in 1602, the
Dutch East India Company issued shares that were made tradable on the
Amsterdam Stock Exchange
Euronext Amsterdam is a stock exchange based in Amsterdam, the Netherlands. Formerly known as the Amsterdam Stock Exchange, it merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext. The r ...
. The development enhanced the ability of joint-stock companies to attract capital from investors, as they could now easily dispose of their shares. In 1612, it became the first 'corporation' in intercontinental trade with 'locked in' capital and limited liability.
[John F. Padgett, Walter W. Powell. The Emergence of Organizations and Markets. (Princeton University Press, 2012. Oct 14, 2012). , 9781400845552 p. 227] The joint-stock company became a more viable financial structure than previous
guild
A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...
s or state-regulated companies. The first joint-stock companies to be implemented in the
Americas
The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World.
Along wit ...
were the
London Company
The London Company, officially known as the Virginia Company of London, was a division of the Virginia Company with responsibility for colonizing the east coast of North America between latitudes 34° and 41° N.
History Origins
The territor ...
and the
Plymouth Company.
[John F. Padgett, Walter W. Powell. The Emergence of Organizations and Markets. (Princeton University Press, 2012. Oct 14, 2012). , 9781400845552 p. 227]
Transferable shares aim to achieve positive returns on
equity
Equity may refer to:
Finance, accounting and ownership
* Equity (finance), ownership of assets that have liabilities attached to them
** Stock, equity based on original contributions of cash or other value to a business
** Home equity, the dif ...
, which is evidenced by investment in companies like the East India Company, which used the financing model to manage their trade on the
Indian subcontinent. Joint-stock companies paid out divisions (dividends) to their shareholders by dividing up the profits of the voyage in the proportion of shares held. Divisions were usually cash, but when
working capital was low and detrimental to the survival of the company, divisions were either postponed or paid out in remaining cargo, which could be sold by shareholders for profit.
[John F. Padgett, Walter W. Powell. The Emergence of Organizations and Markets. (Princeton University Press, 2012. Oct 14, 2012). , 9781400845552 p. 227]
However, in general,
incorporation
Incorporation may refer to:
* Incorporation (business), the creation of a corporation
* Incorporation of a place, creation of municipal corporation such as a city or county
* Incorporation (academic), awarding a degree based on the student having ...
was possible by
royal charter or
private act, and it was limited because of the government's jealous protection of the privileges and advantages thereby granted.
[John F. Padgett, Walter W. Powell. The Emergence of Organizations and Markets. (Princeton University Press, 2012. Oct 14, 2012). , 9781400845552 p. 227]
As a result of the rapid expansion of capital-intensive enterprises in the course of the
Industrial Revolution in Europe and the United States, many businesses came to be operated as
unincorporated associations or extended
partnerships, with large numbers of members. Nevertheless, membership of such associations was usually for a short term so their nature was constantly changing.
[John F. Padgett, Walter W. Powell. The Emergence of Organizations and Markets. (Princeton University Press, 2012. Oct 14, 2012). , 9781400845552 p. 227]
Consequently, registration and incorporation of companies, without specific legislation, was introduced by the
Joint Stock Companies Act 1844
The Joint Stock Companies Act 1844 (7 & 8 Vict. ''c.''110) was an Act of the Parliament of the United Kingdom that expanded access to the incorporation of joint-stock companies.
Before the Act, incorporation was possible only by royal charter ...
. Initially, companies incorporated under this Act did not have limited liability, but it became common for companies to include a limited liability clause in their internal rules. In the case of ''
Hallett v Dowdall'', the
Court of the Exchequer held that such clauses bound people who have notice of them. Four years later, the
Joint Stock Companies Act 1856
The Joint Stock Companies Act 1856 (19 & 20 Vict c 47) was an Act of the Parliament of the United Kingdom. It was a consolidating statute, recognised as the founding piece of modern United Kingdom company law legislation.
Overview
Unlike other A ...
provided for limited liability for all joint-stock companies provided, among other things, that they included the word "limited" in their company name. The landmark case of ''
Salomon v A Salomon & Co Ltd'' established that a company with legal liability, not being a partnership, had a distinct
legal personality
Legal capacity is a quality denoting either the legal aptitude of a person to have rights and liabilities (in this sense also called transaction capacity), or altogether the personhood itself in regard to an entity other than a natural pers ...
that was separate from that of its individual shareholders.
Corporate law
The existence of a corporation requires a special legal framework and body of law that specifically grants the corporation legal personality, and it typically views a corporation as a fictional person, a legal person, or a moral person (as opposed to a natural person) which shields its owners (shareholders) from "corporate" losses or liabilities; losses are limited to the number of shares owned. It furthermore creates an inducement to new investors (marketable stocks and future stock issuance). Corporate statutes typically empower corporations to own property, sign binding contracts, and pay taxes in a capacity separate from that of its shareholders, who are sometimes referred to as "members". The corporation is also empowered to borrow money, both conventionally and directly to the public, by issuing interest-bearing bonds. Corporations subsist indefinitely; "death" comes only by absorption (takeover) or bankruptcy. According to
Lord Chancellor Haldane,
This 'directing will' is embodied in a corporate Board of Directors. The legal personality has two economic implications. It grants creditors (as opposed to shareholders or employees) priority over the corporate assets upon liquidation. Second, corporate assets cannot be withdrawn by its shareholders, and assets of the firm cannot be taken by personal creditors of its shareholders. The second feature requires special legislation and a special legal framework, as it cannot be reproduced via standard contract law.
The regulations most favorable to
incorporation
Incorporation may refer to:
* Incorporation (business), the creation of a corporation
* Incorporation of a place, creation of municipal corporation such as a city or county
* Incorporation (academic), awarding a degree based on the student having ...
include:
Financial disclosure
In many jurisdictions, corporations whose shareholders benefit from limited liability are required to publish annual
financial statements and other data so that creditors who do business with the corporation are able to assess the creditworthiness of the corporation and cannot enforce claims against shareholders. Shareholders, therefore, experience some loss of privacy in return for limited liability. That requirement generally applies in Europe, but not in
common law
In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omniprese ...
jurisdictions, except for publicly traded corporations (for which financial disclosure is required for investor protection).
Corporate taxation
In many countries, corporate profits are taxed at a corporate tax rate, and dividends paid to shareholders are taxed at a separate rate. Such a system is sometimes referred to as "
double taxation" because any profits distributed to shareholders will eventually be taxed twice. One solution, followed by as in the case of the Australian and UK tax systems, is for the recipient of the dividend to be entitled to a tax credit to address the fact that the profits represented by the dividend have already been taxed. The company profit being passed on is thus effectively taxed only at the rate of tax paid by the eventual recipient of the dividend.
In other systems, dividends are taxed at a lower rate than other income (for example, in the US), or shareholders are taxed directly on the corporation's profits, while dividends are not taxed (for example,
S corporation
An S corporation, for United States federal income tax, is a closely held corporation (or, in some cases, a limited liability company (LLC) or a partnership) that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal ...
s in the US).
Closely held corporations and publicly traded corporations
The institution most often referenced by the word "corporation" is
publicly traded
A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (list ...
, which means that the company's shares are traded on a public stock exchange (for example, the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...
or
Nasdaq
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
in the United States) whose shares of stock of corporations are bought and sold by and to the general public. Most of the largest businesses in the world are publicly traded corporations.
However, the majority of corporations are
privately held
A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
, or closely held, so there is no ready market for the trading of shares. Many such corporations are owned and managed by a small group of businesspeople or companies, but the size of such a corporation can be as vast as the largest public corporations.
Closely held corporations have some advantages over publicly traded corporations. A small, closely held company can often make company-changing decisions much more rapidly than a publicly traded company, as there will generally be fewer voting shareholders, and the shareholders would have common interests. A publicly traded company is also at the mercy of the market, with capital flow in and out based not only on what the company is doing but also on what the market and even what the competitors, major and minor, are doing.
However, publicly traded companies also have advantages over their closely held counterparts. Publicly traded companies often have more
working capital and can delegate debt throughout all shareholders. Therefore, shareholders of publicly traded company will each take a much smaller hit to their returns as opposed to those involved with a closely held corporation. Publicly traded companies, however, can suffer from that advantage. A closely held corporation can often voluntarily take a hit to profit with little to no repercussions if it is not a sustained loss. A publicly traded company often comes under extreme scrutiny if profit and growth are not evident to stock holders, thus stock holders may sell, further damaging the company. Often, that blow is enough to make a small public company fail.
Often, communities benefit from a closely held company more so than from a public company. A closely held company is far more likely to stay in a single place that has treated it well even if that means going through hard times. Shareholders can incur some of the damage the company may receive from a bad year or slow period in the company profits. Closely held companies often have a better relationship with workers. In larger, publicly traded companies, often after only one bad year, the first area to feel the effects is the workforce with layoffs or worker hours, wages or benefits being cut. Again, in a closely held business the shareholders can incur the profit damage rather than passing it to the workers.
The affairs of publicly traded and closely held corporations are similar in many respects. The main difference in most countries is that publicly traded corporations have the burden of complying with additional securities laws, which (especially in the US) may require additional periodic disclosure (with more stringent requirements), stricter corporate governance standards as well as additional procedural obligations in connection with major corporate transactions (for example, mergers) or events (for example, elections of directors).
A closely held corporation may be a
subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
of another corporation (its
parent company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
), which may itself be either a closely held or a public corporation. In some jurisdictions, the subsidiary of a listed public corporation is also defined as a public corporation (for example, in
Australia
Australia, officially the Commonwealth of Australia, is a sovereign
''Sovereign'' is a title which can be applied to the highest leader in various categories. The word is borrowed from Old French , which is ultimately derived from the L ...
).
By countries
Australia
In
Australia
Australia, officially the Commonwealth of Australia, is a sovereign
''Sovereign'' is a title which can be applied to the highest leader in various categories. The word is borrowed from Old French , which is ultimately derived from the L ...
corporations are registered and regulated by the Commonwealth Government through the
Australian Securities and Investments Commission
The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
. Corporations law has been largely codified in the
Corporations Act 2001.
Brazil
In
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
there are many different types of legal entities ('), but the two most common ones commercially speaking are (i) ', identified by "Ltda." or "Limitada" after the company's name, equivalent to the British limited liability company, and (ii) ' or ', identified by "SA" or "Companhia" in the company's name, equivalent to the British public limited company. The "Ltda." is mainly governed by the new Civil Code, enacted in 2002, and the "SA", by Law 6.404, dated December 15, 1976, as amended.
Bulgaria
In
Bulgaria
Bulgaria (; bg, България, Bǎlgariya), officially the Republic of Bulgaria,, ) is a country in Southeast Europe. It is situated on the eastern flank of the Balkans, and is bordered by Romania to the north, Serbia and North Mac ...
, a joint-stock company is called a ' or ' ( bg,
Акционерно дружество or )
Canada
In
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tota ...
both the federal government and the
provinces have corporate statutes, and thus a corporation may be incorporated either provincially or federally. Many older corporations in Canada stem from
Acts of Parliament
Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of parliament ...
passed before the introduction of general corporation law. The oldest corporation in Canada is the
Hudson's Bay Company; though its business has always been based in Canada, its
Royal Charter was issued in England by
King Charles II in 1670, and became a Canadian charter by amendment in 1970 when it moved its corporate headquarters from London to Canada. Federally recognized corporations are regulated by the
Canada Business Corporations Act.
Chile
The
Chile
Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the eas ...
an form of joint-stock company is called ''sociedad por acciones'' (often abbreviated "SpA"). They were created in 2007 b
Law N° 20.190 and they are the most recent variety of societary types, as they represent a simplified form of corporation – originally conceived for venture capital companies.
Czech Republic and Slovakia
The
Czech form of the public limited company is called ' (') and its private counterpart is called ' (').
Their
Slovak equivalents are called ' (') and ' (').
German-speaking countries
Germany
Germany, officially the Federal Republic of Germany (FRG),, is a country in Central Europe. It is the most populous member state of the European Union. Germany lies between the Baltic and North Sea to the north and the Alps to the sou ...
,
Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
,
Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
and
Liechtenstein recognize two forms of company limited by shares: the ''
Aktiengesellschaft
(; abbreviated AG, ) is a German word for a corporation limited by Share (finance), share ownership (i.e. one which is owned by its shareholders) whose shares may be traded on a stock market. The term is used in Germany, Austria, Switzerland (wh ...
'' (AG), analogous to
public limited companies (or corporations in US/Can) in the English-speaking world, and the ''
Gesellschaft mit beschränkter Haftung'' (GmbH), similar to the modern
private limited company.
Italy
Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical ...
recognizes three types of company limited by shares: the
public limited company (''
società per azioni'', or S.p.A.), the
private limited company (''società a responsabilità limitata'', or S.r.l.), and the publicly traded partnership (''società in accomandita per azioni'', or S.a.p.a.). The latter is a hybrid of the
limited partnership
A limited partnership (LP) is a form of partnership similar to a general partnership except that while a general partnership must have at least two general partners (GPs), a limited partnership must have at least one GP and at least one limited ...
and public limited company, having two categories of shareholders, some with and some without limited liability, and is rarely used in practice.
Japan
In
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the no ...
, both the state and local public entities under the
Local Autonomy Act (now
47 prefectures, made in the 19th century and
municipalities) are considered to be . Non-profit corporations may be established under the
Civil Code
A civil code is a codification of private law relating to property, family, and obligations.
A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdictions with a civil code, a number of the core ar ...
.
The term or (企業 ''kigyō'') is used to refer to business corporations. The predominant form is the ''
Kabushiki gaisha'' (株式会社), used by public corporations as well as smaller enterprises. ''
Mochibun kaisha'' (持分会社), a form for smaller enterprises, are becoming increasingly common. Between 2002 and 2008, the existed to bridge the gap between for-profit companies and non-governmental and non-profit organizations.
Norway
In Norway, a joint-stock company is called an ''aksjeselskap'', abbreviated ''AS''. A special and by far less common form of joint-stock companies, intended for companies with a large number of shareholders, is the publicly traded joint-stock companies, called ''allmennaksjeselskap'' and abbreviated ''ASA''. A joint-stock company must be incorporated, has an independent legal personality and limited liability, and is required to have a certain capital upon incorporation. Ordinary joint-stock companies must have a minimum capital of NOK 30,000 upon incorporation, which was reduced from 100,000 in 2012. Publicly traded joint-stock companies must have a minimum capital of NOK 1 million.
Romania
In Romania, a joint-stock company is called "societate pe acțiuni". According t
Law 31/1991there are two types of joint-stock companies: "societatea pe acțiuni" and "societate în comandită pe acţiuni".
Russia
See:
Open joint-stock company (OJSC).
Spain
In
Spain there are two types of companies with limited liability: (i) "S.L.", or ''Sociedad Limitada'' (a private
limited company), and (ii) "S.A.", or ''Sociedad Anónima'' (similar to a
public limited company).
Ukraine
There exist several types of joint stock companies ( uk, Акціонерне Товариство, ') in
Ukraine. Due to specifics of the Soviet economy, all enterprises in the Soviet republic as the rest of the
Soviet Union were state owned and private entrepreneurship was strictly prohibited and criminally prosecuted. Following the Gorbachev initiated broad spectrum reforms (
perestroika
''Perestroika'' (; russian: links=no, перестройка, p=pʲɪrʲɪˈstrojkə, a=ru-perestroika.ogg) was a political movement for reform within the Communist Party of the Soviet Union (CPSU) during the late 1980s widely associated wit ...
), there was introduced a term of
khozraschet
''Khozraschyot'' ( rus, хозрасчёт, p=ˌxozrɐˈɕːɵt; short for 'economic accounting') was an attempt to simulate the capitalist concepts of profit and profit center into the planned economy of the Soviet Union.
Meaning
The term ...
and permission for organization of public economic entities called cooperatives.
Following
dissolution of the Soviet Union
The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the So ...
, Ukraine's economy along with the rest former Soviet republics was further reformed to more liberal. Along with private entrepreneurship, many state owned companies were privatized, primarily by the former party's
apparatchik
__NOTOC__
An apparatchik (; russian: аппара́тчик ) was a full-time, professional functionary of the Communist Party of the Soviet Union or the Soviet government ''apparat'' ( аппарат, apparatus), someone who held any position ...
s which gave a rise of another term "Red directors". Many companies started to be sold at open market and commercialized. Those companies were transformed in joint-stock companies by selling their shares for mutual cooperation and investment.
As in the rest former Soviet republics (predominantly Russia) in Ukraine were created following commercial companies:
* National Joint-stock company
* Open Joint-stock company
* Closed Joint-stock company
In 2009 further reforms were introduced and open joint-stock companies were forced to be restructured as public joint-stock company ( uk, Публічне Акціонерне Товариство, links=no, ') or private joint-stock company ( uk, Приватне Акціонерне Товариство, links=no, ').
Minimum amount of share capital is 1250 minimum wages (as of 1 January 2017 4,000,000
UAH or 148,000
USD).
Ukrain
National Securities and Stock Market Commissionis the main stock market state authority.
United Kingdom
Most companies are regulated by the
Companies Act 2006. The most common type of company is the private
limited company ("Limited" or "Ltd"). Private limited companies can either be limited by shares or by guarantee. Other corporate forms include the
public limited company ("plc") and the private
unlimited company.
Some corporations, both public and private sector, are formed by Royal Charter or Act of Parliament.
A special type of corporation is a
corporation sole
A corporation sole is a legal entity consisting of a single ("sole") incorporated office, occupied by a single ("sole") natural person. , which is an office held by an individual natural person (the incumbent), but which has a continuing legal entity separate from that person.
United States
Several types of conventional corporations exist in the
United States. Generically, any business entity that is recognized as distinct from the people who own it (i.e., is not a sole proprietorship or a partnership) is a corporation. This generic label includes entities that are known by such legal labels as 'association', 'organization' and 'limited liability company', as well as corporations proper.
Only a company that has been formally incorporated according to the laws of a particular state is called a "corporation." A corporation was defined in the
Dartmouth College case of 1819, in which
Chief Justice Marshall of the
United States Supreme Court stated: "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of the law." A corporation is a legal entity, distinct and separate from the individuals who create and operate it. As a legal entity the corporation can acquire, own, and dispose of property in its own name like buildings, land and equipment. It can also incur liabilities and enter into contracts like franchising and leasing. American corporations can be either profit-making companies or non-profit entities. Tax-exempt non-profit corporations are often called "501(c)3 corporations," after the section of the
Internal Revenue Code
The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...
that addresses the tax exemption for many of them.
In some states, such as Colorado, a corporation may represent itself
pro se in courts of law in some situations
[Brachfeld, Aaron, USDA (February 2012)]
"Judge Boyette rules on corporate rights to self-represent"
''Meadowlark Herald'' Volume 3 Issue 6. Retrieved February 19, 2012.
The
federal government
A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government (federalism). In a federation, the self-governin ...
can only create corporate entities pursuant to relevant powers in the
U.S. Constitution. Thus, virtually all corporations in the U.S. are incorporated under the laws of a particular state. A major exception to the federal non-participation in the incorporation of private businesses is in
bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Becau ...
ing; under the
National Bank Act, banks may receive charters from the federal government as "
national banks", subjecting them to the regulation of the federal
Office of the Comptroller of the Currency rather than state banking regulators.
All states have some kind of "general corporation law" (California, Delaware, Kansas, Nevada and Ohio actually use that exact name) which authorizes the formation of private corporations ''without'' having to obtain a charter for each one from the state legislature (as was formerly the case in the 19th century). Many states have separate, self-contained laws authorizing the formation and operation of certain specific types of corporations that are wholly independent of the state general corporation law. For example, in California, nonprofit corporations are incorporated under the Nonprofit Corporation Law, and in Illinois, insurers are incorporated under the Illinois Insurance Code.
Corporations are created by filing the requisite documents with a particular state government. The process is called "incorporation", referring to the abstract concept of clothing the entity with a "veil" of artificial personhood (embodying, or "corporating" it, 'corpus' being the Latin word for 'body'). Only certain corporations, including banks, are chartered. Others simply file their articles of incorporation with the state government as part of a registration process.
Once incorporated, a corporation has artificial personhood everywhere it may operate, until such time as the corporation may be dissolved. A corporation that operates in one state while being incorporated in another is a "foreign corporation". This label also applies to corporations incorporated outside of the United States. Foreign corporations must usually register with the secretary of state's office in each state to lawfully conduct business in that state.
A corporation is legally a citizen of the state (or other jurisdiction) in which it is incorporated (except when circumstances direct the corporation be classified as a citizen of the state in which it has its head office, or the state in which it does the majority of its business). Corporate business law differs dramatically from state to state. Many prospective corporations choose to incorporate in a state whose laws are most favorable to its business interests. Many large corporations are incorporated in
Delaware
Delaware ( ) is a state in the Mid-Atlantic region of the United States, bordering Maryland to its south and west; Pennsylvania to its north; and New Jersey and the Atlantic Ocean to its east. The state takes its name from the adjacen ...
, for example, without being physically located there because that state has very favorable corporate tax and disclosure laws.
Companies set up for
privacy
Privacy (, ) is the ability of an individual or group to seclude themselves or information about themselves, and thereby express themselves selectively.
The domain of privacy partially overlaps with security, which can include the concepts of a ...
or asset protection often incorporate in
Nevada, which does not require disclosure of share ownership. Many states, particularly smaller ones, have modeled their corporate statutes after the
Model Business Corporation Act, one of many model sets of law prepared and published by the
American Bar Association.
As
juristic persons
A juridical person is a non-human legal person that is not a single natural person but an organization recognized by law as a fictitious person such as a corporation, government agency, NGO or International (inter-governmental) Organization (such ...
, corporations have certain rights that attach to natural persons. The vast majority of them attach to corporations under state law, especially the law of the state in which the company is incorporated – since the corporations very existence is predicated on the laws of that state. A few rights also attach by federal constitutional and statutory law, but they are few and far between compared to the rights of natural persons. For example, a corporation has the personal right to bring a lawsuit (as well as the capacity to be sued) and, like a natural person, a corporation can be libeled.
Harvard College
Harvard College is the undergraduate college of Harvard University, an Ivy League research university in Cambridge, Massachusetts. Founded in 1636, Harvard College is the original school of Harvard University, the oldest institution of higher ...
, an undergraduate school of
Harvard University, formally the
President and Fellows of Harvard College (also known as the Harvard Corporation), is the oldest corporation in the western hemisphere. Founded in 1636, the second of Harvard's two governing boards was incorporated by the
Great and General Court of Massachusetts in 1650. Significantly, Massachusetts itself was a corporate colony at that time – owned and operated by the Massachusetts Bay Company (until it lost its charter in 1684) – so Harvard College is a corporation created by a corporation.
Many nations have modeled their own corporate laws on American business law. Corporate law in
Saudi Arabia, for example, follows the model of New York State corporate law. In addition to typical corporations in the United States, the federal government, in 1971 passed the
Alaska Native Claims Settlement Act
The Alaska Native Claims Settlement Act (ANCSA) was signed into law by President Richard Nixon on December 18, 1971, constituting at the time the largest land claims settlement in United States history. ANCSA was intended to resolve long-standin ...
(ANCSA), which authorized the creation of 12 regional native corporations for
Alaska Natives
Alaska Natives (also known as Alaskan Natives, Native Alaskans, Indigenous Alaskans, Aboriginal Alaskans or First Alaskans) are the indigenous peoples of Alaska and include Iñupiat, Yupik, Aleut, Eyak, Tlingit, Haida, Tsimshian, and a ...
and over 200 village corporations that were entitled to a settlement of land and cash. In addition to the 12 regional corporations, the legislation permitted a 13th regional corporation without a land settlement for those Alaska Natives living out of the
State of Alaska at the time of passage of ANCSA.
Other business entities
Almost every recognized type of organization carries out some economic activities (for example, the
family). Other organizations that may carry out activities that are generally considered to be ''business'' exist under the laws of various countries:
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Consumers' cooperative
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Holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
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Limited company (Ltd)
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Limited liability company (LLC)
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Limited liability limited partnership (LLLP)
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Limited liability partnership (LLP)
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Limited partnership
A limited partnership (LP) is a form of partnership similar to a general partnership except that while a general partnership must have at least two general partners (GPs), a limited partnership must have at least one GP and at least one limited ...
(LP)
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Low-profit limited liability company (L3C)
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Not-for-profit corporation
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Open joint-stock company (OJSC)
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Partnership
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Sole proprietorship
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Trust company
See also
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Aktieselskab
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Types of business entity
A business entity is an entity that is formed and administered as per corporate law in order to engage in business activities, charitable work, or other activities allowable. Most often, business entities are formed to sell a product or a servi ...
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Public–private partnership
References
Further reading
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External links
The History of the Corporate Business Firm
{{DEFAULTSORT:Joint-Stock Company
Legal entities
Types of business entity
ja:ジョイント・ストック・カンパニー