joint stock company

A joint-stock company is a type of business that is owned by several investors . The company’s investors buy and sell stock , or shares without approval of other investors or significant change to the company. Such a company will exist perpetually, even as shares are exchanged, and investors leave. A joint-stock company is a separate legal entity from its shareholders, meaning the company owns its own assets or debts apart from the individuals who own shares.

The number of shares the shareholders (investors) own correlates to the portion/percentage of the company they own. Joint-stock companies allow each shareholder to have voting rights in company actions and benefit from the company’s success. Additionally, joint-stock companies combine the corporation structure with the flexibility of a partnership . In fact, joint-stock companies are often synonymous to limited liability companies (LLC).

A familiar example of a joint-stock company is Apple Inc .

There are three types of joint-stock companies:

• Registered Company - Registered with state and local regulations to organize and conduct business.
• Chartered Company - Incorporated under a royal charter or other sovereign authority .
• Statutory Company - Established by a statute or legislation to benefit the public.

[Last reviewed in August of 2024 by the Wex Definitions Team ]