Public limited company (PLC)

Public limited company (PLC):

A Public limited company is a company that offers limited liability to its shareholders. Private limited company’s shares are listed and can be bought and sold on the stock market by members of the public.

Methods to start a Public limited company: Following methods has to be followed to start a private limited company.

·        Memorandum of Association (MOA)

·        Articles of Association (AOA):

·        Statutory Declaration:

·        Getting Certificate of Incorporation: After inspecting above documents if registrar is satisfied will issue Certificate of Incorporation.

·        Certificate of Trading from registrar: To list companies shares in stock exchange and to collect money by selling shares company has to get Trading Certificate from registrar and start the business.

Features of Public Limited Company:

ü A public limited company should use the word Public limited or ‘PLC’ at the end of the name of the company.

ü There is no limit in maximum number of shareholders

ü It is owned by shareholders

ü It is controlled by board of directors

ü Startup capital should be at least £50,000.00

ü Shares are listed and traded freely at a stock exchange market

ü Public limited company can be started only after receiving certificate of trading

ü Shares can be issued to general public

ü Profit received by board of directors and provide dividend to share holders

ü Shareholders potentially lose only amount they have invested(Limited Liability)

Advantages of Public Limited Companies:

ü Shareholders have limited liability.

ü It can invite general public to buy its shares and debentures.

ü Large amount of capital is possible as they can sell shares to general public.

ü It has a separate legal identity; death of a shareholder does not affect the life of company.

ü Shareholders have no management worries.

Disadvantages of Public Limited Companies:

ü It is difficult to manage the larger Public Limited Companies

ü Formation of PLC is complicated and costly.

ü Annual accounts must be published. There can be little secrecy or privacy.

ü Shareholders have a little control over management.

ü It must have minimum two directors.

ü It has to comply with many government rules and regulations.