Joint Stock Company

Definition of Joint Stock company

A Joint Stock company is a business entity in which shares of the company’s stock can be bought and sold by shareholders.


Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership).

Shareholders are able to transfer their shares to others without any effects on the continued existence of the company.

In modern-day corporate law, the existence of it is often synonymous with incorporation (possession of legal personality separate from shareholders) and limited liability (shareholders are liable for the company’s debts only to the value of the money they have invested in the company). Therefore, they are commonly known as corporations or limited companies.

Some jurisdictions still provide the possibility of registering joint-stock companies without limited liability. In the United Kingdom and other countries that have adopted its model of company law, they are known as unlimited companies. In the United States, they are known simply as joint-stock companies.


The shares of it can be transferred. When some of them are public, its shares are traded on stock exchanges. Shares of private joint-stock company stock can be transferred between individuals. The transfer is usually restricted by agreement. So, the stocks may be shared between members of the family, for example.

Investors in these companies have unlimited liability. That means that a shareholder’s personal property could be taken to pay off debts if a company doesn’t have on its accounts.

This term is practically identical to a corporation, or public company. The exception is the association with unlimited liability. A modern corporation is a joint-stock company that has been incorporated in order to limit shareholder liability.

Every country has its own laws concerning the Joint Stock company. These frequently involve a process to restrict liability.