Q.Distinguish between partnership firm and joint stock company.

A joint stock company is an association of persons formed to carry on business, with a legal identity independent of its members. It is an artificial person created by law, having a separate legal entity, perpetual succession and a common seal, governed by The Companies Act, 2013. Shareholders are the owners; the Board of Directors, elected by them, manages the business, so owners have only indirect control. Capital is divided into transferable units called shares.

Key features: it is an artificial person that can own property, contract, sue and be sued; it has an identity distinct from its members; formation is compulsory but complex; perpetual succession means it ends only through legal winding-up; and members' liability is limited to the unpaid amount on their shares, spreading risk over many shareholders. …