A business structure wherein capital is raised by selling shares to investors. These investors become partial owners of the company and are entitled to a share of the profits, based on the number of shares they possess. A key characteristic is the pooling of resources from many investors, allowing for ventures that would be too expensive for individual merchants. An example is the British East India Company, which secured funding through the sale of stock to finance its trade operations in Asia.
This model facilitated large-scale colonial expansion and global trade. By distributing risk among numerous shareholders, it encouraged investment in potentially lucrative, but also inherently risky, overseas ventures. This reduced the financial burden on individual investors and enabled the accumulation of substantial capital, fueling exploration, colonization, and the establishment of trading networks across continents. This form of organization was instrumental in the development of mercantilism and the rise of European power during the early modern period.
