What is a joint-stock company? Please explain this with an example.
A joint-stock company is a type of business organization wherein the risk and cost of doing business is mitigated through the sale of shares. In a joint-stock company, individuals are able to purchase portions of the company in the form of shares, thus making the new shareholders partial owners and investors in the company. In this way both the risk and cost of doing business were distributed over a large number of people rather than it being concentrated on a single person. The most famous joint-stock companies in history were those founded in Europe for the purposes of conducting long-distance overseas trade. The English and Dutch East India Companies were far and away the most successful, growing to such heights as to even create their own informal empires in Asia.
A joint-stock company is a company that belongs to the individuals who own its shares. It is a business entity in which people can buy and sell its stock. Each stockholder owns company stock in proportion. Stockholders can sell their stocks to others without the sale affecting the company’s existence in any way.
In the United States, shareholders can freely sell stocks of a joint stock company. However, they are liable for all debts of the company.