A joint stock company enjoys perpetual existence because

Analyze the question: It asks why a joint stock company (a limited liability company) has perpetual existence, meaning it continues to exist regardless of changes in its membership, such as the death, resignation or bankruptcy of shareholders.

Concept: A joint stock company is registered under the Companies and Allied Matters Act (CAMA). Once registered, it becomes a corporate entity, meaning it is a separate legal person, distinct from its owners (the shareholders). Because the company is its own legal person:

• It can own property, sue and be sued in its own name.
• It does not "die" when a shareholder dies or sells their shares.
• Only a legal process (liquidation or winding up) can end it.

Going through the options:

• A. Higher degree of specialization: This relates to efficiency in management and production, not to the company's lifespan.
• B. It is a corporate entity: Correct. Separate legal personality is what gives the company continuity, or perpetual succession.
• C. Formed by a minimum of seven members: This is a registration requirement for a public company in older law. It has nothing to do with how long the company lasts.
• D. Its shares are easily...: This option is incomplete in the question, but it likely refers to shares being easily transferable. Transferability allows owners to change, but it is the separate legal personality that actually ensures the company continues to exist.

Answer: B. it is a corporate entity

Tip: Remember the phrase "Corporate = Continuous." Whenever you see perpetual existence, perpetual succession, sue and be sued, or separate legal entity, think corporate personality.