Justify the following statement:

The Board of Directors is the elected representative of the shareholders.


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  • A Joint Stock Company is a business organization with a wide scope of business activity.
  • Though shareholders of the company are the part of owners as well as the members of the Joint Stock Company, they cannot participate in the management and day-to-day functioning of the company since they are scattered over a large geographical area.
  • So, as such the shareholders during the Annual General Meeting elect the directors to act as their representatives and carry on the business activities of the company.

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