Advantages of a Public Limited Company (Plc)

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Gagan Rai Harish        AVCE Business

Tesco is a public limited company (plc). A lot of big companies go public. This is because unlike a private limited, a plc is able to advertise the sale of shares and sell them to members of the general public though the stock exchange.

Advantages of a Public Limited Company (Plc)

  • Shares can be advertised
  • Shares can be sold through the stock exchange
  • Large plc’s may find it easier to borrow from banks
  • Shareholders have limited liability
  • Cheaper borrowing and bulk purchasing

Disadvantages of a Public Limited Company (Plc) 

  • Going public can be expensive
  • Some plc’s can grow so large that they may become difficult to manage effectively
  • Risk of takeover by rival companies who have bought shares in the company

A lot of companies go public. This is because of all the advantages on top. The shares can be advertised so that means more people will see it and might invest in it. The shares can be sold through the stock exchange. This means it is open to the public and it’s not only the people who get invited can by its share. Tesco can find it easier to borrow from banks because the banks know that they will get their money back with there interest.  

There are several different types of owner ship. They are:

  • Sole traders
  • Parternership
  • Private limited companies
  • Public limited companies (Tesco’s)
  • Co-operative
  • Not for profit or a charity
  • Franchise

Sole trader

A Sole Trader is a business that is owned by only 1 person. They are responsible for everything that goes on in the business. An example of a sole trader is usually an off licence, taxi driver, sweet shop etc.  

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Advantages of a Sole Trader

  • Easy to set up – no legal formalities of fees
  • Own boss and can make all the decisions
  • Keep all profits
  • Can be set up with relatively little capital
  • Personal contact with customers can encourage consumer loyalty

Disadvantages of a Sole Trader

  • Owner have limited funds and may find it difficult to borrow money from banks
  • Owner have to work long hours and cannot afford to be sick
  • The owner have unlimited liability
  • The owner must be a ‘jack of all trades’  
  • Small businesses are ...

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