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A joint-stock company is a business entity which is owned by shareholders. Each shareholder owns the portion of the company in proportion to his or her ownership of the company's shares (certificates of ownership).^[1] This allows for the unequal ownership of a business with some shareholders owing a larger proportion of a company than others. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.^[2]

In modern corporate law, the existence of a joint-stock company is often synonymous with incorporation (i.e. possession of legal personality separate from shareholders) and limited liability (meaning that the shareholders are only liable for the company's debts to the value of the money they invested in the company). And as a consequence joint-stock companies are commonly known as corporations or limited companies.

Some jurisdictions still provide the possibility of registering joint-stock companies without limited liability. In the United Kingdom and other countries which have adopted their model of company law, these are known as unlimited companies. In the United States, they are, somewhat confusingly, known as joint-stock companies.

Advantages[link]

Ownership of stock confers a large number of privileges. The company is managed on behalf of the shareholders by a Board of Directors, elected at an Annual General Meeting. The shareholders also vote to accept or reject an Annual Report and audited set of accounts. Individual shareholders can sometimes stand for directorships within the company, should a vacancy occur, but this is uncommon.

The shareholders are usually liable for any of the company debts that exceed the company's ability to pay. However, the limit of their liability only extends to the face value of their shareholding. This concept of limited liability largely accounts for the success of this form of business organization.

Ordinary shares entitle the owner to a share in the company's net profit. This is calculated in the following way: the net profit is divided by the total number of owned shares, producing a notional value per share, known as a dividend. The individual's share of the profit is thus the dividend multiplied by the number of shares that they own.^[3]

Early joint-stock companies[link]

The transfer letter dated 1288 through which bishop Peter of Västerås re-acquires 1/8 of Tiskasjöberg, i.e. Kopparberget. The original can be found at Riksarkivet (National Archive) in Stockholm.

Finding the earliest joint-stock company is a matter of definition. Around 1250 in France at Toulouse, 96 shares of the Société des Moulins du Bazacle, or Bazacle Milling Company were traded at a value that depended on the profitability of the mills the society owned.^[4] The Swedish company Stora has documented a stock transfer for 1/8 of the company (or more specifically, the mountain in which the copper resource was available) as early as 1288.

In more recent history, the English were first with joint-stock companies. The earliest recognized company was the Company of Merchant Adventurers to New Lands, chartered in 1553 with 250 shareholders. Russia's Muscovy Company, which had a monopoly on trade between Moscow and London, was chartered soon after in 1555. The much more famous, wealthy and powerful English (later British) East India Company was granted an English Royal Charter by Elizabeth I on December 31, 1600, with the intention of favouring trade privileges in India. The Royal Charter effectively gave the newly created Honourable East India Company a 15-year monopoly on all trade in the East Indies.^[5] The Company transformed from a commercial trading venture to one that virtually ruled India as it acquired auxiliary governmental and military functions, until its dissolution.

The East India Company's flag initially had the flag of England, St George's Cross, in the corner.

Soon afterwards, in 1602, the Dutch East India Company issued shares, that were made tradeable on the Amsterdam Stock Exchange. An invention that enhanced the ability of joint-stock companies to attract capital from investors as they now easily could dispose their shares.

During the period of colonialism, Europeans, initially the British, trading with the Near East for goods, pepper and calico for example, enjoyed spreading the risk of trade over multiple sea voyages. The joint-stock company became a more viable financial structure than previous guilds or state-regulated companies. The first joint-stock companies to be implemented in the Americas were The London Company and The Plymouth Company.

Transferable shares often earned positive returns on equity, which is evidenced by investment in companies like the British East India Company, which used the financing model to manage trade in India. Joint-stock companies paid out divisions (dividends), to their shareholders by dividing up the profits of the voyage in the proportion of shares held. Divisions were usually cash, but when working capital was low and it was detrimental to the survival of the company, divisions were either postponed or paid out in remaining cargo which could be sold by shareholders for profit.

However, in general, incorporation was only possible by Royal charter or private act, and was limited owing to the government's jealous protection of the privileges and advantages thereby granted.

As a result of the rapid expansion of capital intensive enterprises in the course of the Industrial Revolution in Britain, many businesses came to be operated as unincorporated associations or extended partnerships, with large numbers of members. Nevertheless, membership of such associations was usually short term, so their nature was constantly changing.

Consequently, registration and incorporation of companies without specific legislation was introduced by the Joint Stock Companies Act 1844. Initially companies incorporated under this Act did not have limited liability, although it became common for companies to include a limited liability clause in their internal rules. In the case of Hallett v Dowdall the English Court of the Exchequer held that such clauses bound people who have notice of them. Four years later the Joint Stock Companies Act 1856 provided for limited liability for all joint-stock companies provided, amongst other things, that they include the word "limited" in their company name. The landmark case of Salomon v A Salomon & Co Ltd established that a limited liability company had a distinct legal personality, separate from that of its individual shareholders.

See also[link]

Companies portal

• Aktieselskab
• Types of business entity

References[link]

Further reading[link]

• Davis, J.S. (1917). Essays in the Earlier History of American Corporations (vols. 1–2 ed.). Cambridge, MA: Harvard University Press. 
• Ekelund, R.B. & Tollison, R.D. (1980). "Mercantilist origins of the corporation". Bell Journal of Economics (The RAND Corporation) 11 (2): 715–720. DOI:10.2307/3003390. JSTOR 3003390. 
• Fisher, F. J. (1933). "Some experiments in company organization in the early seventeenth century". Economic History Review (Blackwell Publishing) 4 (2): 177–194. DOI:10.2307/2590601. JSTOR 2590601. 
• Freedman, C.E. (1979). Joint-Stock Enterprise in France 1807–1867: From Privileged Company to Modern Corporation. Chapel Hill: University of North Carolina Press. 
• Hunt, B.C. (1936). The Development of the Business Corporation in England, 1800–1867. Cambridge, MA: Harvard University Press. 
• Lobban, M. (1996). "Corporate identity and limited liability in France and England 1825-67". Anglo-American Law Review 25: 397. 
• Mayson, S.W et al. (2005). Mayson, French & Ryan on Company Law (22nd ed.). London: Oxford University Press. ISBN 0-19-928531-4. 

External links[link]

• The History of the Corporate Business Firm

Stock company can refer to:

• Joint-stock company, a business entity which is owned by shareholders
• Stock company, a group of actors resident to a repertory theatre

This disambiguation page lists articles associated with the same title. If an internal link led you here, you may wish to change the link to point directly to the intended article.

John Micklethwait (born 1962, London, England) is the editor-in-chief of The Economist.

Biography[link]

Micklethwait was born in 1962 and educated at the independent school Ampleforth College and Magdalen College, Oxford, where he studied history. He worked for Chase Manhattan Bank for two years and joined The Economist in 1987. Prior to becoming editor-in-chief, he was United States editor of the publication and ran the New York Bureau for two years. Before that, he edited the Business Section of the newspaper for four years. His other roles have included setting up an office in Los Angeles for The Economist, where he worked from 1990 to 1993. He has covered business and politics from the United States, Latin America, Continental Europe, Southern Africa and most of Asia.

He was also a delegate, along with two colleagues, at the 2010 Bilderburg Conference held in Spain. This group consists of an assembly of notable politicians, industrialists and financiers who meet annually to discuss issues on a non-disclosure basis.

A frequent broadcaster, he has appeared on CNN, ABC News, BBC, C-SPAN, PBS and NPR. He is the co-author of several books with Adrian Wooldridge, including:

• The Witch Doctors
• A Future Perfect: the Challenge and Hidden Promise of Globalisation
• The Company: A Short History of a Revolutionary Idea
• The Right Nation: A Study of Conservatism in America
• God is Back

In A Future Perfect, they resurrected the term "cosmocrat".

Appointed as editor-in-chief on March 23, 2006, the first issue of The Economist published under his editorship was released on April 7, 2006.

Bibliography[link]

• The Company — A Short History of a Revolutionary Idea
• The Right Nation
• The Witch Doctors
• The Future Perfect
• God is Back

External links[link]

• Profile at The Economist
• Inside The Economist Magazine- Stanford's Hoover Institution interview with Micklethwaite
• John Micklethwait: Great Minds like a think- Profile of Micklethwait from The Independent – Archived copy
• Conversations With History Interview with Micklethwait at the Institute of International Studies, UC Berkeley
• Biography from the London Speaker Bureau
• Interview on OpenDemocracy.net
• Biography from Random House
• Interview on The Alligator Online
• Appearances on C-SPAN
  • C-SPAN Q&A interview with Micklethwait, December 2, 2007
• John Micklethwait on Charlie Rose
• Works by or about John Micklethwait in libraries (WorldCat catalog)

References[link]

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