Q.State any three merits and any two limitations of the Joint Stock Company form of organisation.

The company form's strengths in capital and continuity come paired with real costs in formality and speed of decision-making.

Merits (any three):

1. Large capital-raising capacity — a public company especially can raise very large sums from a wide investing public.
2. Limited liability — a shareholder's risk is capped at their investment (or the unpaid value of their shares), attracting investors who would not risk unlimited personal liability.
3. Perpetual succession — the business continues undisturbed by the death or exit of any individual shareholder or director.

(Other acceptable merits: professional management, and easy transferability of shares giving investors liquidity.)

Limitations (any two):

1. Complex and expensive formation — incorporation requires far more legal formality and expense than a sole proprietorship or partnership.
2. Slower decision-making — many decisions require board, and sometimes shareholder, approval, which takes time compared to a sole proprietor acting alone. …