Business: Section 1 (Public Limited Companies, PLCS)

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Business: Section 1 (Public Limited Companies)

Advantages

  • LIMITED LIABILITY
  • Sell shares through stock exchange therefore more potential buyers so can raise more capital.
  • Status of company is increased by becoming plc , banks more likely to lend money.

Disadvantages

  • Shareholders OWN , Directors CONTROL : This may lead to conflict as directors may decide things that do not benefit shareholders.
  • Someone may buy enough shares to take over the company (If they can convince shareholders to sell)
  • Shareholders generally want to make as much profit as possible , therefore other objectives become hard to achieve such as helping the environment.

Evaluation

When a private limited company meets certain minimum requirements (Number of shareholders and its record of profitability) it can choose to convert into a PLC.Formed when a private limited company is floated onto the stock marketCan only sell new shares if all shareholders agree

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