Types of Joint Stock Companies

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The form of a joint stock company enables it to centralize free money and/or the savings of public. Due to this it is suitable for activities demanding business capital. In highly developed countries it is one of the most frequent forms of doing business. It is one of the oldest kinds of capital association. Joint Stock Company is suited for cases where the number of shareholders is large or when its shares are to be traded on the Stock Exchange. A joint-stock company is a company the basic capital of which is divided into certain number of shares, which are securities with nominal value. The company is liable for the breach of its obligations up to the extent of the entire property. Doing business with the aim of making a profit does not have to represent its only business activity. Its goal may also be accumulation of certain basic capital. A share represents a security connected with which are rights of a shareholder to act as a partner and to participate in the management of the company, in profit and in the liquidation balance at the dissolution of the company. The law does not specify the external form of the share but it must always be in a written form. The shares may be bearer shares and inscribed shares. They may be employee shares, preference shares, capital stock, normal shares, etc. Issuing of shares connected with a right for certain interest regardless of the economic results of the company is not permitted. According to the last amendment of the Civil Code a share may be issued as a materialized or listed security. Bearer shares may be issued only as listed securities. The removal of the anonymity of the bearer shareowner should mostly contribute to better transparency of ownership relations in the process of privatization. The company statutes must determine the value of all kinds of shares, which are to be issued. The total sum of pars of these shares must correspond to the amount of the basic capital. The par of a share must be expressed by a positive integer.

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