6 Lecture - Joint Stock Company (Continued)

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6 Lecture

MGT211

Midterm & Final Term Short Notes

Joint Stock Company (Continued)

Joint stock company is a type of business organization where capital is divided into shares and held by shareholders. It has a separate legal entity and the liability of shareholders is limited to their investment. The management is entrusted to


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Midterm & Finalterm Prepration
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  1. What is the liability of shareholders in a joint stock company? a) Unlimited liability b) Limited liability c) No liability d) Joint liability Answer: b) Limited liability

  2. Who is responsible for making strategic decisions in a joint stock company? a) Shareholders b) Board of Directors c) CEO d) Government Answer: b) Board of Directors

  3. What is the purpose of an audit in a joint stock company? a) To provide assurance that the financial statements are accurate and comply with accounting standards b) To maximize shareholder profits c) To provide tax advice d) To reduce expenses Answer: a) To provide assurance that the financial statements are accurate and comply with accounting standards

  4. Can a private joint stock company sell shares to the public? a) Yes b) No Answer: b) No

  5. What is the maximum number of shareholders allowed in a private joint stock company? a) 10 b) 50 c) 100 d) Unlimited Answer: b) 50

  6. How is ownership transferred in a joint stock company? a) Through a board of directors decision b) Through government intervention c) Through the sale of shares d) Through a court order Answer: c) Through the sale of shares

  7. What is an IPO? a) The sale of shares to institutional investors b) The sale of shares to private individuals c) The sale of shares to the public d) The repurchase of shares by the company Answer: c) The sale of shares to the public

  8. Who appoints independent auditors in a joint stock company? a) Shareholders b) Board of Directors c) CEO d) Government Answer: a) Shareholders

  9. What is the main benefit of a joint stock company? a) Limited liability for shareholders b) Unlimited liability for shareholders c) Lower taxes d) Easier management structure Answer: a) Limited liability for shareholders

  10. Can a public joint stock company have an unlimited number of shareholders? a) Yes b) No Answer: a) Yes



Subjective Short Notes
Midterm & Finalterm Prepration
Past papers included

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  1. What is a joint stock company? Answer: A joint stock company is a type of business organization where the capital is divided into shares and held by shareholders.

  2. What is the role of the board of directors in a joint stock company? Answer: The board of directors is responsible for making strategic decisions and overseeing the management of the company.

  3. What is the difference between a private and public joint stock company? Answer: A private joint stock company cannot sell shares to the public, while a public joint stock company can sell shares to the public.

  4. What is an IPO? Answer: An IPO (Initial Public Offering) is the first time a company offers shares to the public.

  5. What is the liability of shareholders in a joint stock company? Answer: The liability of shareholders is limited to their investment in the company.

  6. What is the purpose of an audit in a joint stock company? Answer: The purpose of an audit is to provide assurance that the financial statements are accurate and comply with accounting standards.

  7. How is ownership transferred in a joint stock company? Answer: Ownership is transferred through the sale of shares.

  8. What is a shareholder's right to vote? Answer: A shareholder's right to vote allows them to vote on important decisions, such as electing the board of directors.

  9. Can a joint stock company have more than one CEO? Answer: Yes, a joint stock company can have multiple CEOs.

  10. What is the difference between authorized and issued share capital? Answer: Authorized share capital is the maximum amount of shares a company can issue, while issued share capital is the number of shares that have been issued and are in the hands of shareholders.

A joint stock company is a popular form of business organization that allows the pooling of resources from multiple investors to start and run a business. In a joint stock company, ownership is divided into shares that can be bought and sold by shareholders. This provides flexibility in ownership transfer and allows companies to raise capital through the sale of shares. One of the key features of a joint stock company is limited liability, which means that shareholders are only liable for the amount they have invested in the company. This ensures that shareholders are not personally liable for any debts or liabilities of the company. The board of directors is responsible for making strategic decisions and overseeing the management of the company. Shareholders elect the board of directors and have the right to vote on important decisions such as changes to the company's articles of association, the election of directors, and major business decisions. A joint stock company can be either private or public. Private joint stock companies cannot sell shares to the public and have limited number of shareholders, while public joint stock companies can sell shares to the public and have no restrictions on the number of shareholders. Public joint stock companies are required to disclose their financial statements and other information to the public. When a joint stock company decides to go public, it may choose to issue an Initial Public Offering (IPO). An IPO is the first time a company offers shares to the public. This allows the company to raise additional capital for expansion or other business purposes. In conclusion, joint stock companies are popular business organizations that allow multiple investors to pool resources to start and run a business. They offer flexibility in ownership transfer, limited liability, and the ability to raise capital through the sale of shares. The board of directors is responsible for making strategic decisions and overseeing the management of the company, while shareholders have the right to vote on important decisions.

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