Advantages And Weaknesses Of Joint Stock Company

Advantages:-

The corporation from of organisation has following advantages:-

1. The owners have limited liability. Hence, there is a guarantee that they need not lose more than their investment.
2. Since shares are marketable, the corporation can take large size.
3. The ownership can be easily transferred.
4. The firm has long, unlimited life. The firm is not dissolved in the event of death of any owner.
5. The service of professional managers can be taken.
6. Since, the firm has access to the capital market funds can be easily raised or the firm can expand easily.
7. The firm can take tax benefits.

Weaknesses:-

The corporation form of organisation has following weaknesses:-

1. Generally, taxes are higher. The tax is imposed on the income of the corporation as well as the dividend distributed to the owners.
2. It is expensive to establish in comparison to other forms of organisations.
3. There are more government regulations.
4. The employees have less interest in the activities of the firm.
5. There is no secrecy, since financial report should be submitted the shareholders.