Joint-stock company
Joint-stock company. A manufacturing or trading association in which the stock is divided into shares and the share owners bear a limited liability to the amount of their investment. Profits are distributed in the form of dividends proportionally to the shareholder’s investment and irrespective of his function in the process of production.
In Ukraine the first joint-stock companies appeared at the end of the 18th century. By the 1860s they were quite common in the metallurgical industry and coal industry of the Donets Basin, and were financed mostly by foreign capital investment. Some of the more important joint-stock companies were the Cockerill-Dnipro Metallurgical Association, the Donets Company in Druzhkivka, the Central Donets Company in Almazna, and the Prodamet and Produgol syndicates. In 1911 joint-stock companies owned 5.3 percent of all manufacturing concerns and produced 60 percent of Ukraine’s industrial output. By 1913 the shares in railroad transportation and urban transit and other industries were worth 97 million rubles. One of the first Ukrainian joint-stock companies to appear in Western Ukraine was the Narodna Torhovlia consumer co-operative (est 1883) in Lviv. During the period of the New Economic Policy the central government in Moscow used joint-stock companies as one of the means to control industry and trade in Soviet Ukraine. Thus the Radio Company created in Moscow in 1924 expanded its operations in 1925 to Kharkiv and Kyiv, and then in 1927 to Dnipropetrovsk, Artemivsk (Donetsk oblast), Staline, and Odesa. Beginning in 1928 joint-stock companies were replaced with state associations controlled by the appropriate Soviet people's commissariats. After the Second World War joint-stock companies, in which the Soviet Union had a controlling interest, were established in several East European countries. In the 1960s joint-stock companies with a limited participation of large Western firms began to reappear in the USSR.
Lubomyr Szuch
[This article originally appeared in the Encyclopedia of Ukraine, vol. 2 (1988).]