VOLUNTARY WINDING UP UNDER THE SUPERVISION OF COURT

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According to section 396 of Companies Ordinance, a voluntary winding up of a company can also be carried under the strict registration of the court. 1.  Resolution At first, company has to pass special resolution for the voluntary winding up of the company. 2.  Supervision Order Following are the common grounds on which the court issues the supervision order: 1.  The liquidator performs his duty in partial manner. 2.  The winding up resolution is obtained by fraud. 3.  The liquidator does not strictly observe the rules of winding up the company 3.  Power of the Court The court has the power to appoint an additional liquidator, or to remove any liquidator. 4.  Dissolution After the supervision order is made, the liquidator may exercise his powers in winding up of a company.  On completion of winding up, the court will make an order that the company is dissolved. Share Capital; In simple words, the term “capital” means the particular amoun...
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DISADVANTAGES OF JOINT STOCK COMPANY

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Some of the disadvantages of the joint stock company are given below:

1. Initial Difficulties
It is more difficult to establish a joint stock company as compared to other business
organizations.

2. Lack of Interest
Most shareholders become relaxed and leave all the functions to be carried out by the
directors. This usually encourages the directors to promote their own interest at the cost of
the company.

3. Labor Disputes
In such organization there is no close contact of the workers with the owners or the
shareholders. This leads to formation of labor unions to fight against the company’s
management.

4. Lack of Responsibility 
There is lack of personal interest and responsibility in the business of a joint stock company.
If any mistake occurs, everybody tries to shift or transfer his responsibilities to other
persons and he remains safe.

5. Lack of Secrecy
A joint stock company cannot maintain its secrecy due to the reason that a company has to
submit various reports to the registrar.

6. Lack of Freedom
A joint stock company cannot perform its functions freely because it has to submit various
reports to the registrar form time to time.

7. Monopoly
Due to larger size and resources, a joint stock company is in a position to create monopoly.
Sometimes a few customers make agreement and exploit the consumers.

8. Speculation
Due to free transfer of shares and limited liability, speculation in the stock market takes
place, which may affect the economy of the country.

9. Corruption
The directors of the company do not show the picture of the company to the public and
encourage corruption by changing the policies for their personal interest.

10. Complicated Process
The formation of a joint stock company is a complicated process due to many legal
formalities.

11. Centralization of Power
In joint stock Company, all the powers have in a few hands and due to this; an ordinary
shareholder cannot participate in the affairs of a company.

12. Double Taxes
A joint stock company has to pay double taxes to the government. Firstly, company pays tax
on the whole profit of the company. Secondly, every shareholder pays tax on his individual
income.

13. Exploitation
Ordinary shareholders do not have full information about the affairs of their company. So,
they are exploited.

14. Problem of Large‐Scale Production 
Since joint stock company produces on large‐scale, so many problems arise in the economy.

15. Nepotism 
In a joint stock company, the directors of company employ their inefficient and incapable
relatives and friends and give key jobs to them. As a result, the company suffers a loss.

16. Late Decision
In joint stock company, the decision making process in time consuming because a meeting is
necessary to solve the business problems and matters.


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