Q.State any four limitations of a joint stock company.

A joint stock company can raise huge capital and give limited liability, but these advantages come with real drawbacks.

A joint stock company is a large-scale form of business with a separate legal entity and limited liability, governed by the Companies Act, 2013. Despite its strengths it has several limitations:

1. Difficult and costly formation — forming a company involves many legal formalities, documents and expenses, unlike the easy formation of a proprietorship or partnership.
2. Lack of business secrecy — a company must publish its audited accounts and file returns, so its financial position becomes public and secrecy is lost.
3. Excessive legal regulation — a company is bound by continuous statutory compliance, meetings, filings and government control throughout its life. …

Do not write 'unlimited liability' as a limitation of a company — a company's members have LIMITED liability. The genuine drawbacks are procedural and structural (cost of …