IntroductionWhensome people voluntarilyconstruct
anorganizationbyinvestingtheir moneyfor thepurpose of earning
profit according to the rules and regulations of the respective
country is calledJoint-Stock Company (JSC).his business is operated
by its o!n "ame # $ogo and consideredas an artificial being having
a separate o!nership from management. hus a company may
bedefinedasavoluntaryassociation% anincorporatedassociation% legal
andinvisibleartificialpersonhavinganindependent% separate legal
entityalong!ithperpetual successionandacommon seal% !hose liability
is ordinarily limited% the capital is divided into transferable
shares%held by shareholders in order to earn profit. Classification
of Joint stock company Chartered Company: he companies that form by
the order of the &ead of a country arecalled the
chartercompany. hese companies!ere formed before '()).*or
e+ample%,ast -ndia Company% Chartered .ank of ,ngland% the charter
of the .ritish South /fricaCompany% given by 0ueen 1ictoria
Statutory Company: Companies that are formed by the order of the
2resident% or by the$egislativeCommitteeorbybill of2arliament
arecalledStatutoryCompany. heseCompaniesareoperatedbythosela!s.
*ore+ample% municipal councils% universities%central banks and
government regulators% Central .ank. '
RegisteredCorporation:Companiesthat
areformedundertheprevailingla!ofthecompany are called the
registered company. he corporation that has filed a
registrationstatement !ith the S,C prior to releasing a ne! stock
issue. -t is t!o types-i) Unlimited Company:3nlimited Company is a
company!herethe liabilities of theshareholders of this company are
unlimited. *or e+ample% .ritish all-terrain vehicle
manufacturer$and 4over% 5la+oSmith6line Services 3nlimited.ii)
LimitedCompany/ LimitedCorporation:$imitedcompanyis
acompany!heretheliabilities of the shareholders are limited. *or
e+ample% Charitable organizations% *inancialServices /uthority. his
liability of a company can be of t!o types.a) .y 5uaranteeb) .y
share value. he company limited by share can be of t!o types 7
Priate Limited Company ! / company !here the number of shareholder
ranges fromt!o to fifty members and !hich are formed by at least
t!o individuals having minimumpaid up capital are called the
private limited company. he shares allotted to its membersare also
notfreely transferable bet!een themand these companies are
notallo!ed toraise money from the public through open invitation.
-.e. a type of company that offerslimited liability to its
shareholders but that places certain restrictions on its o!nership.
Pu"lic Limited Company ! 2ublic $imited Company is company !here
the number ofshareholder ranges fromseventoshare limitation. he
share of the public limitedcompany is traded in the stock
market.#ifferences "et$een Priate Limited Company and Pu"lic
LimitedCompanyPriate Limited Company Pu"lic Limited Company'.
8embership 8inimummembership9%8a+imummembership:;8inimummembership.
"umber of ?irectors -t must have at least t!odirectors-t must
haveat least threedirectors9 ).ransfer of Shares he shares are not
freelytransferableShares are freelytransferable.:. -ssue of
2rospectus -t is allo!ed to issueprospectus-t can issue
prospectus@. Commencement of.usiness-t can start the businessafter
the receipt ofcertificate of incorporation.-t re=uires trading
certificatefor starting business; days of submission of
registration form the register !ill register thecompany.-f the
register !ill not satisfied !ith the information then after period
the register !illinform the initiators !ithin '; days./ccording to
compny act 'AA)%ection9) fter the regitrtion
ofthememorndumofassocitiontheregister!ill
providetheregistrationofthecompany./ftergettingtheregitrationtheprivatelimitedcompanycanits
activities but thepubliclimitedcompany needs to collect the
certificate commencement after getting the registration from
theregister for starting the activities.5%C1LL/C)I1, 1' C/R)I'IC*)/
1' C1&&/,C/&/,):/ccording to the company act 'AA) the
directors of the Coint stock company have to collect thecertificate
of commencement after registration of the company.he directors of
the company !illapply to the register in the certified form
provided by the register.-n the ':;(')section of thecompany act
'AA) it is said that%there are some clauses that determine that the
company !ill startits activities or take loan fromthe financial
institution./fter getting the certificate ofcommencement Coint
stock company starts its activities.
6%PR1SP/C)US:2ropectus is an important document for public
limited company..y using thisdocument%promoters makes invitation to
the mass people to buy the initial public offering of therespective
company.5enerally it refers to that informative document that the
registeredorganization uses for the purpose of informing respective
company to collect re=uired capital andto start the proposed
organization.he different definitions of prospectus are given
belo!.(%C1&P*,I/S *C) (774:I?ocument containing offer of shares
or debentures for sell to be deemed as prospectus.GG0%#IC)I1,/R8 1'
)R*#/ *,# C1&&/RC/:I2rospectus is an invitation to the
public to subscribe to the shares capital of the company.
heprospectus is generally circulated to the public in printed
pamphlets.When a person is not issueda statement in lieu of
prospectus must be issued.GG< 9% S)*)/&/,) I, LI/U 1'
PR1SP/C)US:-t is mandatoryfor the public limited
companytodistribute the prospectus but it is notcompulsoryinall
aspects.-t is alsopossible toadopt analternative of prospectus.-t
is notnecessary to distribute prospectus for the company if the
directors are able to raise the re=uiredfunds by selling the shares
and debentures to their friends and relatives.-f the company used
thealternativeof prospectus%it !ill benecessarytosubmit that
copytotheregister.-t is calledsubstitute prospectus or substitute
circular.his substitue holds all theitems that arebeingre=uired in
the original prospectus and it needs to be signature or attested by
the directors. &emorandum of *ssociationhe 8emorandum of
/ssociation is the basic or most important document for the
incorporationor registration of every Joint Stock company. he
8emorandum of /ssociation is the life-givingdocument of the
company. -n other !ords% it is the document !hich brings the
company intoe+istence. -t is the charter or constitution of the
company containing the fundamental
conditionsupon!hichthecompanyisincorporated. -t
isthefoundationon!hichthestructureofthecompany is built. -t
contains the obCects or purposes of the incorporation of the
company anddefinesordeterminesthee+ternal
operationsofthecompany(i.e. companyJsrelationshipordealing !ith the
creditors # other outsides).8emorandum of association can be
defined as%JJ he purpose of the memorandum is to enablethe
shareholders% creditors and those !ho deal !ith the company to kno!
!hat is its permittedrange of enterpriseKhe8emorandumhas
tobedividedinto-suitableparagraphs%
constructivelynumberedandprinted. -t must be signed by every one of
the subscribers in the presence of a !itness !ho shallattest the
signature. ,very subscriber must give his address and descriptions
and must take atleast one share. he 8emorandum of a company limited
by shares must contain the follo!ingclausesD "ame clause /ddress
clause HbCect clause $iability clause Capital clause /ssociation
clause( he 8emorandum of association of every company must contain
the follo!ing clausesD(% ,ame Clause:his clause states the name of
the company.-n the conte+t of the name clause% the follo!ing points
may be borne in mindD') / name is considered undesirable% !hen it
includes !ords like J5overnmentJ% JStateJ%J8unicipalityJ% etc.%
implying patronage or support of the 5overnment% State
or8unicipality% !ithout the e+press permission of such authority.9)
/ name is considered undesirable !hen it is identical !ith or too
closely resemblesthe name of an e+isting company.>) he name of
the company must end !ith the !ord K$imitedK in the case of a
publiccompany or the !ords K2rivate $imitedK in the case of a
private limited company.)) he purpose of adding the !ord K$imitedK
or the !ords K2rivate limitedK is to enableall those dealing !ith
the company to kno! that the liability of the members of thecompany
is limited.:) Hnce a company is registered !ith a name% the name of
the company must be paintedon signboards and displayed outside
every office or place of business of the company.he name must also
be engraved in legible characters on the seal-of the company% onits
letter heads% notices% invoices% receipts% bills of e+change%
advertisements% etc% .&o!ever% if a company is Jformed not !ith
the obCect of declaring dividends% but to promotescience% culture%
etc% .heCentral 5overnment maypermit
thecompanytodropthe!ordJlimitedJ.0% 1":ect clause:') Hf all the
clauses in the memorandum%the obCect clause is the most
important.his clause states the obCects or purposes and po!ers of
the company. -t shouldspecify in unambiguous languages the obCects
for !hich the company is formed.5reat care should be taken in
dra!ing up this clause% as the company !ill not beallo!ed to do any
business% !hich is not specifically mentioned here.9)
heobCectsstatedinthisclausemust not
becontrarytotheprovisionsoftheCompanies /ct and the general la! of
the country. he obCects stated should be as!ideas
possiblebecauseacompanycannot carryout obCects !hicharenotincluded
in this clause. A >) /sit isdifficult toaltertheobCect
clauselater%it isnecessarythat promotersshould include in this
clause all possible types of business (activities) in !hich
acompany may engage in the future.)) /ccordingtotheamendment
totheCompanies /ctmadein'A@:%
theobCectclauseofacompanyformedafterthecommencement ofthe
/mendment/ct%must containDi. (a) 8ain obCects of the company and
obCects incidental or ancillary%to theattainment of these main
obCects.(b) Hther obCects of the company not included aboveii. -n
case the obCects are not to remain confined to one state% states
!hoseterritories the obCects e+tend.>. *ddress Clause:') his
clause states the state in !hich the registered office of the
company is to besituated. 9) henameofthe State%in !hichthe
registered office of thecompany is tobesituated% is stated in the
8emorandum.>) he provision insisting on the mere;State)
.oluntary dissolution under the superision of the court:after the
decision ofvoluntary dissolution% court can give order to dissolute
under its supervision. Court keepsthe pecuniary interest of the
debtor and the creditor./t last !ecansaythat% acompanythat
isestablishedbylegal stepsandalsodissolutefollo!ing some legal
steps. *rom above procedure it becomes clear. Conclusion*rom our
above brief discussion !e can easily say that% a Coint stock
company combines bothpublic limitedcompanyandprivate
limitedcompany. heformationof theCoint stockcompany in our country
is bit complicated. his is !hy Joint Stock Company is not
verypopular in .angladesh but it is very popular to the developed
!orld. Hne more reason behindless popularity of Coint stock Company
in our country can beD much less industries(companies)% lesscapital
ofgeneral peopleandsoon. Hureconomyisnot
asbigasthedevelopedcountryeconomy. herearemanycomplicacies as !ell
!ehavetofacefor99 forming a Coint stock company. he re=uirements
and complicacies are so many to form aCoint stock company that
general people usually feel demotivated to form these companies./s
one of the biggest and mostpopular form of business% .angladesh as
a nation shouldmake the procedure to form a Coint stock company
easier so that people feel interested toform Coint stock companies.
he cost to form a Coint stock company should also be decreasedso
that Coint sock company formation can make sense to people and they
feel interested toform this type of business. Reference(%
$$$%$ikipedia%com311+S:
(% Introduction to 3usiness%Criter ! #r% &% *taur Rahman D %
Ra"ihul Islam%0% 3usiness for the 0(st century%Criter ! Steen J%
Skinner D John &% Lannceich%9>