Question

Why were joint-stock companies created?

Answer 1

Answer:

Joint-stock companies were created for two main reasons:

-Its main motivation is to limit the responsibility of the partners of the companies only to the percentage of shares that they own. In this way, investors are protected from possible lawsuits, making them responsible only for the part that belongs to them as owners of the shares.

-In addition, another motivation is to facilitate the investment of private capital, since investors do not have to directly buy a percentage of the company, but the shares are negotiable by themselves. This makes them have a commercial value, which if it increases increases the valuation and investment that the company receives.

Answer 2

Joint-stock companies created by the British Government to establish their settlement in the new world.  

Further Explanations:

The terms were first coined by the British and were also able to spread its colonies. By the 17th century, they were able to colonize most of the Europe and America. The companies were the charters granted by King James I during 1606.companies funded by private investors. These companies became an important aspect of the colonization of “New World”.

These companies were set up by the shareholders or the investor who has invested capital in the company and in return gets the shares from the profit of the company. The Crown was willing to risk its capital in the ventures of overseas exploration that was funded by private investors. These companies were vital in the colonization of newly founded nations. Without Joint-stock companies, Britain would never be able to establish those  13 colonies in the United States.

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Answer Details

Grade: High School

Subject: History

Chapter: Joint-stock

Keywords: Joint-stock, British ,companies, private ,investors, shareholders, Joint-stock, colonization , New World, British, colonize, Europe ,America.