Q.Choose the correct alternative: The liability of members of a joint stock company is ______.

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.

Merits: limited liability, free transfer of interest, perpetual existence, large scope for expansion, and professional management. Limitations: complex, costly formation; lack of secrecy; an impersonal work environment; numerous regulations; delays in decision-making; oligarchic (rule-by-a-few) management; and conflicts among stakeholders. Terms such as perpetual succession, common seal and artificial person are the hallmarks that distinguish the company from all other forms.