Consider the following statements about a joint-stock company: 1. It has a legal existence. 2. There is limited liability of shareholders. 3. It has a democratic management. 4. It has a collective ownership. Which of the statements given above are correct

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Q: (CDS-I/2019)
Consider the following statements about a joint-stock company:
1. It has a legal existence.
2. There is limited liability of shareholders.
3. It has a democratic management.
4. It has a collective ownership.
Which of the statements given above are correct?

question_subject: 

General Knowledge

question_exam: 

CDS-I

stats: 

0,17,11,4,3,4,17

keywords: 

{'collective ownership': [0, 0, 0, 1], 'shareholders': [0, 0, 2, 3], 'stock company': [0, 0, 0, 1], 'limited liability': [0, 0, 1, 1], 'legal existence': [0, 0, 0, 1], 'democratic management': [0, 0, 0, 1]}

The correct answer is option 4, which states that all of the statements given are correct.

Let`s dissect each statement to better understand why they are correct:

1. It has a legal existence: A joint-stock company is a registered legal entity that is independent of its shareholders. This means that it can enter into contracts, own property, and sue or be sued in its own name.

2. There is limited liability of shareholders: In a joint-stock company, the liability of shareholders is limited to the amount they have invested in the company. This means that their personal assets are protected from the company`s debts and obligations.

3. It has a democratic management: Joint-stock companies usually have a board of directors elected by the shareholders. The directors make important decisions on behalf of the company, and shareholders have a right to vote in major company decisions.

4. It has collective ownership: A joint-stock company is owned collectively by its shareholders, who hold shares of stock that represent their ownership in the company. The shareholders share in the company`s profits and losses.

In conclusion, all of the statements mentioned in the question are correct, making option 4 the correct answer.

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