Disadvantages of Joint Stock Companies
Difficult to form:
The formation & registration of joint stock company involves a long
and complicated procedure. A number of legal documents and formalities
have to be completed before a company can start business. The process
of formation requires the services of specialists such as chartered
accountants, company secretaries, etc. Becuse of all this, the cost of
formation of a company is very high.
Excessive government control:
Joint stock companies are regulated by government through the Companies
Act and other economic legislations. Especially, public limited
companies are required to complete various legal formalities as
provided in the Companies Act and other legislations. Non-compliance
with these causes a heavy penalty. This affects the smooth functioning
of the companies.
Delay in policy decisions:
Generally policy decisions are taken at the “Board of
Directors” meetings of the company. Further, the company has to
fulfill certain procedural formalities. These procedures are time
consuming and therefore, may delay action on the decisions.
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Table Of Contents
- How to incorporate?
- Understanding Sole Proprietorships
- - Advantages of Sole Proprietorships
- - Disadvantages of Sole Proprietorships
- - What kind of business is suitable for Sole Proprietorships?
- - How to start a Sole Proprietorship business?
- Understanding Partnerships Business
- - Advantages of a Partnership Business
- - Disadvantages of a Partnership Business
- - Different types of partnership firms
- - Business suitable for Partnerships legal structure
- - How to form partnership deeds & start a partnership firm?
- Understanding Joint Stock Companies (Private & Public Ltd.)
- - Advantages of Joint Stock Companies
- - Disadvantages of Joint Stock Companies
- - Business suitable for Joint Stock Companies
- - Procedure to start a Joint Stock Company? (Incorporation)