A joint-stock company refers to a company with shares as its capital, and its shareholders are liable to the company to the extent of the shares subscribed by them.
According to the Company Law of China, the establishment of a joint stock limited company shall be initiated by two or more persons, but not more than 200 persons, and the minimum registered capital shall be RMB 5 million.
Because all joint-stock companies must be limited liability companies (but not all limited companies are joint-stock companies), they are generally called "joint-stock companies".
Joint-stock companies came into being in Europe in the18th century, and were widely popular in capitalist countries in the second half of the19th century. So far, joint-stock companies have dominated the economy of capitalist countries.
There are two forms of statutory companies in China: limited liability companies and joint stock companies.
Limited company is the most important organizational form for Chinese enterprises to implement corporate system, which refers to registration according to the Regulations of the People's Republic of China on the Administration of Company Registration.
Its advantage is that the establishment procedure is relatively simple, and there is no need to issue an announcement or account number. In particular, the company's balance sheet is generally not open, and the company's internal institutions are flexible.
Its disadvantage is that it is impossible to issue shares publicly, and the scope and scale of funds raised are generally small, which is difficult to meet the needs of large-scale production and operation activities.
Therefore, the form of limited liability company (limited company) is generally suitable for small and medium-sized non-joint-stock companies.
References:
incorporated company