Joint-Stock Companies
Definition
Joint-Stock Companies were businesses owned by shareholders who share in its profits but are not personally liable for its debts. They were used during colonial times to fund colonies like Jamestown.
Analogy
Imagine if you and your friends wanted to start a lemonade stand but didn't have enough money individually. So, you all pool your money together to buy supplies, agreeing to share any profits (or losses). That's essentially what joint-stock companies did - they pooled resources from multiple investors to fund ventures like establishing colonies.
Related terms
Shareholder: An individual or institution that legally owns one or more shares of stock in a public or private corporation.
Dividend: The distribution of some of a company's earnings to shareholders, usually as cash payments.
Limited Liability: A type of legal structure for an organization where owners are not personally liable for its debts.
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