In Britain
A joint stock company (JSC) is a type of business partnership. Certificates of ownership or stocks are issued by the company in return for each contribution, and the shareholders are free to transfer their ownership interest at any time by selling their stockholding to others.
In Britain, and elsewhere, there are two kinds of joint stock company. The private company (sometimes called an ‘unlisted company’) is one in which the shares are not offered for sale on the open market. The shares are usually only held by the directors and Company Secretary. The purpose of shareholding in such a company is to confer the financial protection of limited liability upon the owners.
In contrast, a public company (sometimes known as a ‘listed’ company) offers its shares for sale upon the open market - they are ‘listed’ upon the stock exchange. In Britain, they are usually distinguished by the letters ‘PLC’ after their name. The public company can raise part of its capital by a share issue, but the directors have no control over the sale or purchase of its shares. Thus, a public company can be ‘taken over’ by another through the act of purchasing a controlling interest in the shareholding.
Although not, strictly speaking, a joint stock company, a third kind of company is found in Britain. This is known as a guarantee company, and is only formed by societies and organisations for charitable purposes (e.g. sports clubs, hobby groups etc.), as there is no way that a profit can be distributed. No shares are issued, but a number of named directors ‘guarantee’ a specified amount of debt for which they agree to be liable. A guarantee company is usually the first step towards the creation of a charitable trust.