Public Limited Companies

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Public Limited Companies

Advantages

  • Much more capital can be raised by a Public Limited company than by any other kind of business.
  • That helps the company to expand and diversify.

Disadvantages

  • Each shareholder has very little say in how the company is run - unless they own an awful lot of shares.
  • It's easy for someone to buy enough shares to take over the company - if they convince other shareholders to sell.
  • A Public Limited Company can have a large number of shareholders - and there needs to be a general agreement on company objectives. This makes it difficult for a Public Limited Company to sacrifice profit to other objectives, like helping the environment.

Evaluation

'Public' means that shares in the company are traded on a stock exchange, and so can be bought and sold by anyone. Public Limited Companies have 'plc' after their name.Firms generally become Public Limited Companies when they want to expand.

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