A company whose authorized capital is divided into shares - shares certifying the rights of shareholders to a part of the company's capital. The aggregate par value of the issued shares of the organization specified in its charter is "share capital". This organizational form of society is usually used for large commercial and industrial enterprises. In modern corporate law, the importance of a joint stock company has expanded significantly. With regard to shareholder liability, the term “joint stock company” ranges from a partnership to a corporation. According to the obligations of the participants, joint-stock companies are divided into two types:
Joint-stock company with limited liability - an enterprise in which the liability of shareholders is limited to the size of their shares. This means that the shareholders participate in the distribution of profits by receiving dividends, but are not personally liable for the outstanding debts of the company. If the company incurs a loss, shareholders will only lose the amount of their initial investment. This type of company is the most common in practice; therefore, a joint stock company is often understood as a corporation. This form includes Microsoft Corporation, Toyota Motor Corporation, Coca-Cola Company, and others.
A joint stock company with unlimited liability is a company incorporated without limiting the liability of shareholders, that is, shareholders are fully responsible for the payment of debts. In the event of the bankruptcy of a company, its debts to creditors can be paid with the confiscation of the shareholder's personal property. In the UK and other countries that have taken the form of corporate law, these businesses are known as unrestricted companies. For example, the British car manufacturer Land Rover.
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