Corporatization is a major advantage since it can mobilize a massive quantity of financial resources. It is the “number of individuals” who may join a firm, both in India and outside, that determines its size.

The First Option

Even in a private company with a cap of 50 shareholders, prior and present employee-shareholders are excluded from the computation of the number of fifty. The maximum number of partners in a firm is 50, although even that is a large amount.

The Second Thing to Consider in Shared Business

Second, a company must be able to issue shares of lower denomination in order to be able to issue shares of smaller denomination in order to be convenient for small investors.

This is further facilitated by the fact that the company’s Share and debentures may be issued with various features pertaining to the sharing of risk; income; and control, which means that it can be appealing to investors ranging from large to small, cautious to speculative.

Limited liability

For one, the protection from personal liability afforded by a company is an additional advantage. In the great majority of joint stock companies, shareholders are only responsible for the company’s liabilities up to the amount of the face value of their shares in the company and not beyond that amount.

As a result of big-scale manufacturing and distribution, there has been a spectacular development of huge organizations throughout the world, as well as a number of benefits that have resulted.

• In the event that a member wishes to leave the company, they may simply transfer their shares and depart the corporation. Converting stock into cash is not a difficult process since stock exchanges trade most publicly listed firms’ shares.
• A corporation, perhaps, is the only kind of ownership organization that can claim both an everlasting existence and a consistent commercial existence. Because of the firm’s long-term stability, creditors and investors are more likely to put their money into the business because of the firm’s organizational structure.
• Firms that have enormous resources at their disposal, whether they’ve collected them organically or acquired them via other means, may operate commercially on a large scale and in a range of disciplines.

In production, marketing, and finance, the corporation is able to take advantage of economies of scale since its activities are so large.

The Right Choices

Corporations are organized in a way that makes it clear that ownership and management are distinct entities. Owners and managers with exceptional talents might be employed as management personnel because of the separation of ownership and management.

Taking Care of the Company

Managers’ contributions to increased operational effectiveness and efficiency are enhanced by their knowledge, skill, and access to cutting-edge technology. New, better, unorthodox, and even more risky methods of organization and administration are now readily accessible to professional managers, and they can better show improved corporate results.

Conclusion

A business must publish its financial and operational activities in the form of yearly reports and financial statements in order to maintain public trust in the company. Enlightened managers even go so far as to expose their acts in more detail than is permitted by law, even when it is against the law. Having the confidence of the general public has several advantages for a business.