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# Joint-Stock Company

## Definition

A business organisation where capital is contributed by multiple shareholders
who share in the profits and losses, often established with special government
privileges or monopolies.

## Source Chapter

Book IV, Chapter 5

## Context

Smith uses the example of the white herring fishery joint-stock company to
show how government bounties and special privileges can lead to inefficient
capital allocation and eventual business failure.

## Economic Domain

General Theory

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