Commercial Applications
What advantage of a joint stock company is highlighted in this image showing a boardroom meeting of directors?
- Limited Liability
- Efficient Management
- Legal Formalities
- Lack of Motivation
Answer
Efficient Management
Reason — A boardroom meeting of directors highlights the advantage of efficient management of a joint stock company. A company can employ highly qualified experts in different areas of business management. The combined judgement and experience of several directors facilitates balanced and rational decisions. Having more than one manager results in specialisation and division of labour, while centralised management permits unity of action and continuity of policy.
Related Questions
The Reserve Bank of India operates under a special law enacted by the Parliament. Under which category does this organization fall?
- Chartered Company
- Statutory Company
- Registered Company
- Unlimited Company
A public company cannot begin its operations until it has obtained a certificate of incorporation and a certificate to commence business.
- True
- False
What do you understand by separate legal existence of a company?
State three characteristics of a company.