Joint Stock Company

A joint stock company (JSC) is a type of business partnership in which the capital is formed by the individual contributions of a group of shareholders. Certificates of ownership or stocks are issued by the company in return for each contribution, and the shareholders are free to transfer their ownership interest at any time by selling their stockholding to others.

Ownership of stock confers a number of privileges. The company is managed on behalf of the shareholders by an elected Board of Directors. Consequently, the share owner may attend an annual general meeting, and vote for directors and sometimes the principal officers. The shareholders receive an annual report, and vote upon the yearly audited set of accounts. Other resolutions upon important decisions can be put to them. There are other meetings, which may be called, either regularly or by special resolution of either the Board or the shareholders themselves. Of course, individual shareholders can sometimes stand for directorships within the company, should a vacancy occur, but this is unusual.

The shareholders are usually liable for any 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 organisation.

Ordinary shares entitle the owner to a share in the company’s net profit. The individual's share of the profit is the dividend multiplied by the number of shares that they own.

The English started joint stock companies. The earliest recognized company was the Company of the Staple, a monopoly granted a group of 26 merchants in 1363, by Edward III. The British East India Company, sometimes referred to as “John Company”, was one of the more famous joint-stock companies. During the period of colonialism, the joint stock company was a financing model that allowed companies to raise large amounts of capital while lowering risk by diversifying contributed capital among multiple ventures. Europeans, initially the British, trading with the Near East for goods, 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. It also made it affordable to support early colonists in America. It is because of Joint stock companies that the colonization and settlement of America was made possible.

However, in general, incorporation was only possible by Royal charter or private act, and was limited owing to government’s jealous protection of the privileges and advantages thereby granted. As a result, many businesses came to be operated as unincorporated associations with possibly thousands of members. Any consequent litigation had to be carried out in the joint names of all the members and was impossibly cumbersome.

The joint stock company was a forerunner of contemporary corporate entities such as the American business corporation, the British public limited company, the French société anonyme, the German Aktiengesellschaft etc. In some countries, “joint stock company” is used as an English translation for business forms that more closely resemble corporations. While traditional joint stock companies still exist in some areas, they are generally considered an unattractive alternative to limited liability entities.

Notes:

1. joint stock company (JSC) – акционерная компания, акционерное общество (A/О, АО)

2. Board of Directors – правление

3. annual general meeting (AGM) – ежегодное общее собрание

4. shareholding – владение акциями

5. liability – ответственность, обязательство

6. John Company – Ост-Индская компания

7. venture – рискованное предприятие, спекуляция

8. royal charter – королевская грамота; королевский патент; дарованная короной привилегия; королевское пожалование

9. unincorporated associations – неинкорпорированная ассоциация, объединение без прав юридического лица

10. business corporation – амер. торгово- промышленная корпорация (занята в промышленности или торговле)

11. public limited company (PLC) – брит. открытое акционерное общество, общество с ограниченной ответственностью, открытая [публичная] компания с ограниченной ответственностью

12. corporate entity – корпорация, юридическое лицо, правосубъектная организация

I. Прочитайте текст (без словаря).

II. Перепишите и письменно переведите на русский язык следующие предложения. Помните, что объектный и субъектный инфинитивные обороты соответствуют придаточным предложениям.

1. The company debts seem to be increasing greatly.

2. Effects are considered statistically robust only if all three methods generate a significant impact of the same sign.

3. The share owner is said to attend an annual general meeting, and vote for directors and sometimes the principal officers.

4. Traditional joint stock companies are sure to exist in some areas.

5. As we see, neither the EU nor the United States seem to be less disposed toward multilateral negotiations.

III. Перепишите и письменно переведите на русский язык следующие предложения. Обратите внимание на перевод зависимого и независимого (самостоятельного) причастных оборотов.

1. The joint stock company is one of financing models that allow companies to raise large amounts of capital, the other two being guilds and state regulated companies.

2. The risk of trade lowering, the profits of company increase.

3. The “new approach” regulations indicate only “essential” health and safety requirements, allowing greater freedom to manufacturers to satisfy the essential requirements and to industries to flesh out product specifications in the form of voluntary standards.

4. Limited liability companies are the companies that are free from double taxation, state intervention, dividends falling according to company’s debts and obligations.

5. Theory would suggest that sound property rights are a foundation of any country’s investment climate, and, other things being equal, stronger rights would lower risk and entice more investment at the margin.

IV. Перепишите и письменно переведите на русский язык следующие предложения. Обратите внимание на перевод условных предложений.

1. If a vacancy occurs, this individual shareholder will stand for directorship within the company.

2. If the joint stock company hadn’t become the most viable financial structure, the colonization and settlement of America would have been impossible.

3. If the trade agreement leads to trade diversion away from more technologically advanced sources of inputs, then there could be a negative impact on productivity growth.

4. If working capital turned out to be too low, they would consider it detrimental to the survival of the company.

5. If the economy suffers from poor macroeconomic management, high levels of corruption, and poor infrastructure, market by itself will not offset the disadvantages.

V. Прочитайте, перепишите и письменно переведите текст.

VI. Ответьте на вопросы по тексту:

1. What is a joint stock company?

2. How is the joint stock company managed?

3. What are the privileges of ownership of stock?

4. When did joint stock companies start?

5. Hоw can joint stock company be viewed according to the text?

Вариант 3