Joint Stock Company Law & Legal Definition
A joint stock company is company which has some charcteristics of a corporation and some features of a partnership. It is usually unincorporated, and its member pool their capital contributions in a common fund called the stock.
Transferable shares are issued to shareholders in return for their contribution to the stock, and shareholders are liable for all debts of the company. Therefore, it resembles a partnership because of the personal liability of the shareholders, but doesn't require consent of others to transfer shares as in a partnership. Shareholders are both entitled to profits and liable for debts in proportion to the percentage of stock they own. For example, if a shareholder owns 10% of the shares, they are entitled to 10% of the profits, but also liable for 10% of the debts if the company isn't able to satisfy the debt from company funds.
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