Consider the features of a joint stock company. Which of the following statements about such a company are correct?

Introduction / Context:
A joint stock company is one of the most important forms of business organization, especially for large scale enterprises. Competitive examinations often ask about its key features to test your understanding of business structures, corporate law, and economic organization. This question lists four statements and requires you to identify which correctly describe a joint stock company.

Given Data / Assumptions:

• Statement 1: It has a legal existence.
• Statement 2: There is limited liability of shareholders.
• Statement 3: It has a democratic management.
• Statement 4: It has a collective ownership.
• We assume a standard company registered under the Companies Act.

Concept / Approach:
A joint stock company is a separate legal entity distinct from its shareholders. It can own property, enter contracts, sue, and be sued in its own name. Shareholders enjoy limited liability, meaning their risk is generally limited to the amount unpaid on their shares. Management is democratic in the sense that shareholders elect a board of directors through voting, usually on a one share one vote basis. Ownership is collective because many shareholders together own the company by holding its shares, while day to day management is handled by directors and managers on behalf of all owners.

Step-by-Step Solution:
Step 1: Check Statement 1. A joint stock company has a separate legal existence, so this is correct. Step 2: Check Statement 2. Limited liability is a defining feature of companies; shareholders are not personally liable beyond their investment, so this is correct. Step 3: Check Statement 3. Management is democratic because shareholders participate in decision making through voting at general meetings and electing directors, so this is correct. Step 4: Check Statement 4. Ownership is collective, since many shareholders jointly own the firm by holding shares, so this statement is also correct. Step 5: Since all four statements are correct, the right option must include 1, 2, 3 and 4.

Verification / Alternative check:
You can quickly cross check against any standard definition of a joint stock company. All definitions highlight separate legal entity status, limited liability, separation of ownership and management, and broad based ownership through shares. There is no conflicting feature among the four statements, which confirms that they are all correct and form a consistent description of a joint stock company.

Why Other Options Are Wrong:
1 and 2 only: This ignores the democratic management and collective ownership, which are also correct features.
1, 2 and 3 only: This drops collective ownership, even though it is a natural consequence of shareholding by many investors.
3 and 4 only: This omits the crucial features of legal existence and limited liability, so it is incomplete.

Common Pitfalls:
Students sometimes think that democratic management requires equal voting power for each person, which would make them doubt Statement 3. In joint stock companies, democracy is based on shareholding, not equal head count, but it is still considered a democratic form of control. Another pitfall is failing to appreciate the distinction between the company as a legal person and its shareholders as separate individuals. Remember that this separation is fundamental to the company form.

Final Answer:
All four statements correctly describe a joint stock company, so the correct answer is 1, 2, 3 and 4.