BANKING TRADE AND COMMERCE

JOINT STOCK COMPANIES

Joint Stock Companies.—In the absence of any systematic records it is difficult to trace the gradual evolution of the joint-stock companies in Buldhana district. As elsewhere, they appear to have developed out of the partnership or proprietary type of concerns. The latter, as a matter of fact, required a large capital which was not easy for a single individual or even for a partnership firm to obtain. The large amount of capital and credit was not obtainable unless complete and owned security could be provided to the creditor. The joint-stock companies as they exist to-day, therefore, came up as a more suitable form of business organisation through which instability in the business could be reduced to a great extent.

Public Companies: These companies engage themselves in various kinds of productive activities with a view to obtaining profits. As a rule, they require large capital due to the large extent of their operations. Its use is for acquisition and maintenance of plant, equipment, buildings and other fixed assets, for holding current assets in the form of inventories of finished and partly finished products as well as raw materials and stores required for production. Capital is also required to be used as current assets and accounts receivable, etc. Capital is raised by floating shares and by issuing debentures. The shares are transferable or negotiable by law.

There is only one public limited company in the Buldhana district, viz., Janata Trading Company which was established in the year 1954.

Private Companies: The Indian Companies Act of 1956 described the private company " as one which restricts the right to transfer its share, if any, limits the number of its members to fifty and prohibits any invitation to the public to subscribe for any share in, or debentures of, the company. " The Act further lays down that " no company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members, thereof, unless it is registered as a company". Registration, thus, was made compulsory for these companies.

By 1969 there were 5 private companies in Buldhana district. Their work was considerably facilitated when the principle of limited liability was extended to them. These companies raise capital by way of floating non-transferable shares and debentures. They however, pay a rate of interest higher than the one paid by public limited companies with a view to attracting capital.

In the following table is given the name of the company, object, date of registration, authorised, subscribed, issued and paid up capital, and the class of companies to which it belongs.

TABLE No. 9

JOINT STOCK COMPANIES, BULDHANA DISTRICT.

TABLE No. 9— contd.

N.A.— Not available.

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