Definition of joint stock company

A corporation is a legal entity whose existence is distinguished from that of its owner. Its holders participate in the social capital through actions that confer economic and political rights. The shares are differentiated from each other according to the powers they confer or by their nominal value.

The advantages of this type of society are several. First, the owners do not have responsibility personal since the creditors have rights over the assets of the corporation and not over the profits of the shareholders. In second place, the Commerce of shares allows the participation of small investors.

The owners find participation within the company through a supervisory body and administration called the general meeting of shareholders. This is in charge of making decisions that will affect the course of the company. To carry out this task, the board meets once a year in what is called ordinary general meeting of shareholders, although it may happen that for reasons of necessity the shareholders are summoned to what is called

extraordinary general meeting of shareholders, that is, an unusual meeting to deal with emergency situations. Some examples of the topics covered in the meetings are profit sharing, remuneration of directors, dissolution of the company, division of the company, etc. However, a common and highly relevant one is the election of the board of directors.

The board of directors is a body to which the company's administrative decision-making is delegated. Its structure is based on the statutes, which in general are flexible enough to have the most pertinent options as circumstances require.

Corporations are an excellent opportunity to carry out investments when you have a small capital. However, to carry out these operations it is necessary to have a good knowledge of the market and its functioning.

Public Limited Company Topics