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Question
Justify the following statement.
Registration of the Joint Stock Company is compulsory.
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Solution
(1) A joint stock company is defined as an incorporated association. It means it is an association registered under the Companies Act or a special Act of Parliament. In fact, a company comes into existence only when it gets the Certificate of Incorporation from the Registrar of Companies.
(2) In other words, registration is similar to the birth of a company. On getting the Certificate of Incorporation, the company gets an independent legal existence i.e., it becomes a corporate body. An unregistered organisation or association has no corporate existence and hence it cannot be called a ‘company’. Hence, registration of the Joint Stock Company is compulsory.
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