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Public Limited Companies.

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Introduction

B.4 Public Limited Companies These are the largest type of privately owned enterprises in the UK. Many started as private limited companies and were floated on the Stock Exchange. Floated is the term used when a public limited company is launched. A company must have more than �50,000 before it can go public. The benefits for the owners are as follows: 1) The major benefit is vastly increased capital as many thousands of people or organisations may buy shares in the company 2) Some public companies can be quite small - there only needs to be a minimum of two directors and shareholders 3) Very large public companies can often operate more cheaply than small companies as they operate on economies of scale. ...read more.

Middle

An annual general meeting (AGM) must be held each year and all shareholders must be invited. Shareholders who do not agree with the way the company is managed may raise an objection or vote against a proposal 3) Specific accounts must be prepared each year and must be audited. Moreover the accounts must be published so that a problem year cannot be hidden 4) Shareholders will expect to receive a dividend in return for their investment. They will also want their shares to increase in value. If the company has a poor year or if the stock market performs poorly and the shares fall in value, shareholders will be tempted to sell, lowering the price 5) ...read more.

Conclusion

A plc can usually choose from a variety of sources of finance. It may decide to borrow money from a bank or other financial institution 4) A plc may decide to grow quicker by buying shares in other (usually smaller) company. This is a takeover. They do not need to buy all the shares to do this - just enough to give a controlling vote. 5) The net profit (after tax) is paid out to the shareholders in the form of a dividend, although the company will also put a proportion into its reserves each year 6) Typical examples include virtually all the household names you can think of - Marks & Spencers, ICI, Tesco, Boots, Barclays Bank Richard King ...read more.

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