BANKING TRADE AND COMMERCE
JOINT STOCK COMPANIES
The modern joint-stock companies have evolved from purely proprietary or partnership type of concerns. Owing to the expantion of trade and industry, the element of risk involved in business has also grown considerably. Under a joint-stock company a number of merchants come together and share this risk jointly.
This factor has been instrumental for the increase in the number
of jonit-stock concerns and their size.
The jont-stock companies are divided into two kinds viz., the Private Limited Companies and the Public Limited Companies. The main features constituting a Private Limited Company are-
(1) The number of members of such a company shall not be less than two or exceed 50 and the maximum is not to include employees or ex-employees who may be share-holders.
(2) The shares of a Private Limited Company are not transferable without the sanction of the Board of Directors.
(3) A Private Company is not allowed to make air appeal for public subscriptions either for its shares or debentures.
Apart from this a Private Limited Company is a convenient device for the systematic pursuit of small and medium-scale industrial or commercial enterprise.
When a Private Limited Company, however, grows beyond a certain size, it is beneficial to convert it into a Public Limited Company. The latter has the facility of making an appeal for public subscription for its shares or debentures and complying with a large number of legal requirements it also protects the interests of the investing public.
There was not a single joint-stock company in Dhulia district till World War I. The first Joint-stock company in the district was a Cotton Ginning and Pressing factory established in 1919 with its registered office at Nandurbar. Most of the other companies in the district came up during and after World War II. By the beginning of 1959 there were in all 13 joint-stock companies in Dhulia district, out of which 6 were private and 7 were public companies. The total authorised capital of the private companies was Rs. 16,25,000 while their paid up capital amounted to Rs. 5,72,000. The corresponding figures for the public limited companies were Rs. 63,00,000 and Rs. 33,18,189, respectively. The average authorised capital per company was Rs. 6,09,615.