When the operation of a business is to be on a large scale, it cannot be done unless large amount of capital is available. The sole trading concerns, hindu undivided families or partnership organisations may find it difficult to generate huge sum of money.
Moreover, the managerial capacities, in entrepreneurship or partnership firms would be limited and also burdened with unlimited liability. Hence, it essentially necessitates a kind of organisation to be established which is a solution to all such drawbacks. Such a large scale organisation is called a Joint Stock Company.
1. According to Indian Companies Act, 1956, in Sec. 566, “A Company is an artificial person created by law, having a separate legal entity with a perpetual succession and a common seal”.
2. Lord Justice Lindley defined a Company as “an association of many persons who contribute money or money’s worth to a common stock and employ it for a common purpose”.
3. Prof. Haney: –
“Joint Stock Company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership”.
4. Prof. J. Rajan: –
“It is a large scale organisation formed by a group of persons who contribute, towards transferable share capital, money or money’s worth in anticipation of profits. The organisation is created by law with a distinct legal existence, continuity of operation and is identified by a common seal”.
5. Dr. T.V.Raju:-
“A Company is an artificial person recognised by law, with a distinctive name, common seal, common capital comprising of transferable shares of fixed value carrying limited liability and perpetual succession”.