Advantages Of Company Form Of Organization

The company form of organization provides the following advantages:

1. Huge Amount Of Capital

A public company can collect huge amount of capital from its unlimited number of shareholders for large- scale enterprises.

2. Limited Liability

The members or shareholders of a company enjoy the advantage of limited liability. They can not be called upon to pay anything more than the face value of the shares held by them.

3. Permanent Existence

A company has permanent existence. Its life does not depend on the life of its members.

4. Transferability Of Shares

In a public company, the shares of a member can easily be transferred without the consent of other members.

5. Democratic Management

A company management is a democratic in nature, it is managed by elected representatives of its members, which are called 'directors' and their group is called 'Board Of Directors'.

6. Advantages Of Large Scale Of Business

Generally, a joint stock company is a large scale organization, therefore, it enjoys the advantages of large scale in every area of business.