JOINT-STOCK COMPANY, or ASSOCIA TION. An association of individuals who unite to carry on businese for gain, by each taking and paying for shares in the common stock. At coin nano law it is a partnership (q.v.). and is subject to the rules of partnership law. It differs Irian the ordinary partnership, however. in three im portant respects. (1) Its capital stock is divided into transmissible shares; that is, any share holder call sell his shares to a third person, who becomes at once a member of the association, without the assent of the seller's partners. (2) The death of a shareholder does not dissolve the company. (3) The conduct of a joint-stock com pany's business is always limited to a few per sons. A shareholder has no implied authority to act for the company. In order to bind it, he must be designated as a manager, or in some other way receive express authority to act for it.
At present. both in England and in this coun try, joint-stock companies are generally organ ized under statutory provisions. The tendency of such statutes is to assimilate these companies to corporations. without really transforming them into artificial persons. In England. legisla tion has gone further in this direction than in our States. By the Companies Act of 1S62 (25 and 26 Viet.. e. 89) and acts amendatory thereof it is provided that "any seven or more persons associated for any lawful purpose may. by sub scribing their names to a memorandum of associa tion, and otherwise complying with the requisi tion of the act in respect to registration. form an incorporated company with or without limited liability." If the proposed company is to he a limited association, the word 'Limited' most he the last word in its name. Since the enact ment of this legislation, joint-stock companies have multiplied and flourished remarkably in England.
They have not gained equal popularity here, partly because the organization of corporations under general laws is much easier than in Great Britain. and partly because of the introduction of limited partnerships during the last cen tury. While our State legislation varies in mat ters of detail, it generally provides for the or ganization of joint-stock companies by the exe of certain written articles of association by the shareholders, and the filing of these ar ticles in designated public offices. Their busi ness is managed by directors and officers duly elected and announced. Actions may he main tained by the company in the name of some designated officer or officers, and against the com pany in such name. When a judgment is ob tained against the company in a suit of this kind. execution is issued against the company's property, and not against the officer named as the representative of the company, nor against the property of shareholders. Oftentimes the company is allowed to sue its members. as though they were strangers. But as a rule the eominon law liability of each shareholder for all the debts and liabilities of the company has not been modi fied by our legislation. They may lie dissolved by the mutual consent of all the shareholders, as in the ease of an ordinary partnership. or by a decree of a court in a proper proceeding brought therefor. Consult: Hurrell and Hyde, Laic of Joint S'Ioek Companies (London, 189S) ; Lindley, The Law of Companies ( London, 1889) ; Birds eye. Neu. York Statutcs. title "Joint Mock Asso ciations" (New York, 1901).