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Question
Justify the following statement.
A Joint Stock Company can raise huge capital.
Solution
- A Joint Stock Company is an incorporated association.
- It has a legal status independent of its members.
- A Joint Stock Company has a large membership. There is no maximum limit.
- Shares are available in the open market.
- A large number of investors are interested in buying shares.
- Shares are freely transferable and members have limited liability.
- Thus, a Joint Stock Company can raise huge capital. Capital can also be raised by the company from financial institutions.
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