Advantages of Company:

1) Separate Legal Entity:

Company is an artificial person which has its legal existence in the eyes of law separate from its owners. It can enter into agreement, can sue and can be sued by other in its own name.

2) Limited Liability:

Every limited company must have the word “limited” in its name which means the liability of shares holders is limited to the amount of their investment in the company.

3) Transferability of Ownership:

Shares of the company can be bought and sold in the market that is Stock Exchange. This act is known as transferability of ownership which does not affect the life of company.

4) Separate Management:

In the joint stock company, ownership is separate from management. Company is managed by board of directors who are elected by the shareholders from among themselves.

5) Attraction of Huge Capital:

The capital of the company is larger. It can easily increase its capital by selling more shares. Due to the large size of capital, size of company is also larger.

6) Specialized Management:

Because of larger resources, the company may give attractive packages to specialized personnel who have proper academic qualification. These personnel may include MBA, CA, CMA, MCS etc.

7) Ease of Expansion:

A company has number of opportunities to expand its capital and operations. It can raise any amount of funds which shareholders are willing to invest, which is not possible in other forms of ownership.

8) Higher Profit Rates:

Due to large scale of operation, it is possible to earn higher rates of profit. So, the amount of profit divided is generally greater than other forms of ownership.

9) Social Benefits:

Social security contribution, huge amount of capital, increased employment opportunities etc. are those features which enable accompany to provide benefits to society.

10) Spread of Risks:

In a company form of organization, the risk is distributed among large number of shareholders. From the point of view of an investor, it is a great advantage.