A joint-stock company is a fundamentally new form of a production organization

A joint-stock company is a fundamentally new form of a production organization created on the basis of the voluntary participation of its members possessing a certain part of the company's total capital. The creation of such economic relations was a natural result obtained in the process of transformation and development of private entrepreneurship.

At a certain stage of its existence, the increased technological level, the organization of the financial sector and the scale of technological processes created the prerequisites for attracting to the same enterprise the capitals of many individuals who for various reasons independently do not engage in commercial activities. The responsibility of shareholders in such a merger is limited by the amount of their contribution. This condition, simultaneously with a high concentration of capital, allows producing profitable investments not only in prospective, but also in risky projects, which significantly accelerates the introduction of the latest developments in the scientific and technical sphere.

The joint-stock company is the basic organizational form of large enterprises and companies. In the manufacturing sectors of any country in the world, such associations of capital of individuals and corporations are the most perfect legal mechanism in the economic sphere.

The main characteristics of the joint-stock company include:

- dividing the total capital into shares;

- the imposition of liability on shareholders for the obligations of the organization only in the amount of the contribution to the statutory fund;

- organization of activities in accordance with the adopted charter, which is the foundation for mobile changes in the size of total capital and the number of participants;

- the concentration of enterprise management in the hands of the management (board).

A joint-stock company is a form of property that has a number of advantages:

1. The company has a real opportunity to raise funds of shareholders, which will increase its statutory fund and will expand the scope of activity.

2. Separation of general management from specific management makes it possible to select the most suitable candidates for directors. Shareholders interested in production efficiency, are seriously approaching the appointment of leading cadres.

3. Each member of the work collective has the right to become a full-fledged owner, having bought a certain share of shares.

4. It is possible to create a network of interested counterparties by acquiring securities of other companies and realizing their own.

Joint-stock companies are of two types - closed and open. The first type of association involves the presence of no more than fifty participants in its membership. If this limit is violated, then an open joint-stock company must be registered . The organizations of the closed form are released from the obligation to publish the results of their economic and financial activities. That is why they do not have control over external users of information over the operation of the enterprise.

An open joint-stock company is an organizational form that has the ability to attract large capital. A large number of participants provides the most favorable conditions for investing sufficiently large funds that allow the development of production. Shareholders have the right to sell their part of the securities to any buyer at a negotiated price. In order to have control over the situation in the company and pursue the owner's policy, it is enough to possess a package consisting of fifteen percent of the securities, which constitutes the statutory fund.

A joint-stock company is one of the main prerequisites for carrying out economic reforms in the country. The wide distribution and formation of this type of associations creates normal conditions for the activities of enterprises. Being a convenient form for transferring state organizations into a private form of ownership, joint-stock companies make it possible to effectively control the work of administrative structures.