Public limited company.

In a public limited company only two people are needed and there’s no upper limit. Every public limited company has a PLC at the end so that people don’t confuse it for a private limited company. In a PLC the general public as well as other businesses and financial institution can buy shares from a PLC. Organizations rather than individuals own most of the shares in a PLC. In most of the countries the shares of the PLC are bought and sold through the Stock Exchange. For the public’s benefits the share prices are printed in the newspaper so that the public can know the price of their shares. The company can expand selling more shares to the Stock Market. PLC’s are usually larger than Private Limited Companies.

The shareholders like the private limited company have limited liability; this means that if the company goes bankrupt then the shareholders are only responsible for the value of the shares. The company has its own legal status separate from the shareholders. This also means that the company can sue or can be sued. Most of the PLC start of as Private limited companies and then may want to grow but since it cannot sell its shares to the general public so it decides to be a PLC.

Setting up a PLC

There are many rules in setting ...

This is a preview of the whole essay

Setting up a PLC

There are many rules in setting up a PLC then there are for a Private limited company (PVC). The procedures of starting a PLC are similar to a PVC. The company has to draw up a Memorandum of Association and Articles of Association and send these to the Registrar of Companies to apply for a certificate of Incorporation to show the company has registered. Before the certificate of Incorporation is issued, a public limited company needs to convince the registrar of companies that it has raised enough capital, at least 50,000 pounds, and if the company is going to sell shares on the stock exchange then it has to be approved by the stock exchange council. Once the Certificate of Incorporation has been received the company can issue a prospectus. This is an advertisement inviting the public to buy shares in the company. Once the shares have been issued the registrar of companies will draw up a Certificate of Trading. After this the company can start trading.

The public limited companies must appoint a Board of Directors to manage the company. They have to hold an Annual general meeting for the shareholders. They must have their accounts audited annually and a copy must be sent to the registrar of companies where it is available to public.

Advantages

Shareholders have limited liability.
Easy to raise capital by selling shares.
It’s easier to raise finance because the bank will be willing to lend money because it’s a big company.
This makes it easier for a PLC to expand and grow.

Disadvantages