Questions

In 1861, civil war broke out in the USA. USA was the largest supplier of cotton to Britain. Once the civil war broke out, the demand for cotton from India became high and this led to a surge in cotton cultivation in India and there was a period of ‘boom’ then.In May and June 1875, peasants of Maharashtra in some parts of Pune, Satara and Ahmednagar districts revolted against increasing agrarian distress. The Deccan Riots of 1875 targeted conditions of debt peonage (kamiuti) to moneylenders.In 1879, the Agriculturists Relief Act was passed which ensured that the farmers could not be arrested and imprisoned if they were unable to pay their debts.

Joint stock company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.

The definition of a joint stock company highlights the following features of a company.

Separate legal entity:From the day of its incorporation, a company acquires an identity, distinct from its members. Its assets and liabilities are separate from those of its owners. The law does not recognise the business and owners to be one and the same.

The management and control of the affairs of the company is undertaken by the Board of Directors, which appoints the top management officials for running the business. The directors hold a position of immense significance as they are directly accountable to the shareholders for the working of the company. The shareholders, however, do not have the right to be involved in the day-to-day running of the business. The liability of the members is limited to the extent of the capital contributed by them in a company

The risk of losses in a company is borne by all the shareholders. This is unlike the case of sole proprietorship or partnership firm where one or few persons respectively bear the losses.