1, the company is an effective organizational form to raise and absorb social funds. The company provides the simplest and most effective investment place for the public, especially the widespread issuance of small shares, and brings social idle funds into the track of social capital. In addition, issuing stocks abroad and buying foreign stocks have become one of the important forms of international investment.
2. The company has outstanding advantages in economies of scale. On the one hand, we can establish some departments and enterprises that need huge funds, on the other hand, we can quickly expand the production scale of the whole society.
3. The company guarantees the continuity of enterprise life. Because the stock cannot be returned, the stock investment becomes a permanent investment. As long as the company doesn't go bankrupt, the capital stock always exists in the enterprise, which enables the company to survive as an independent civil subject, and avoids the phenomenon that a wholly-owned enterprise or a partnership enterprise gives up halfway because of the death of an investor or the withdrawal of a partner.
4. The company is conducive to diversifying investors' risks.
5. However, joint-stock companies also have some shortcomings:
First, the company's establishment procedures are strict and complicated, and the company has a large scale and a complex membership structure.
Second, the company's equity is scattered, and each shareholder only accounts for a very small part of the company's total capital. Although shareholders have partial ownership of the company, it is irrelevant to the vast majority of minority shareholders, and shareholders are very unstable.
Third, the company's equity is scattered and there are many people, but as long as you master a certain proportion of shares, you can control the lifeblood of the company. Therefore, the company's board of directors can easily use the company to harm the interests of many minority shareholders.
Extended data:
In essence, a company limited by shares is just a special limited liability company.
The characteristics of joint-stock enterprises are mainly:
1. Issue shares as the certificate of shareholders' shares, on the one hand, get dividends, on the other hand, participate in the operation and management of the enterprise;
2. Establish the internal organizational structure of the enterprise. The shareholders' meeting is the highest authority of joint-stock enterprises, the board of directors is the permanent body of the highest authority, and the general manager presides over daily production and business activities;
3. Bear the responsibility of risks. The ownership income of joint-stock enterprises is scattered, and the operating risks are shared by many shareholders.
4. With a strong dynamic mechanism, many shareholders care about the operation of enterprise assets from the perspective of interests, which makes the major decisions of enterprises tend to be optimized, and the development of enterprises can be based on the interest mechanism.
References:
Baidu encyclopedia-joint-stock enterprise