public limited company

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  • Created by: irena4567
  • Created on: 12-12-15 10:38

public limited company -a company that sell shares to the entire public ,they also have limited liability 

Advantages

  • LIMITED LIABILITY-owners personal possessions are not at risk. For example if the business has money owed to the bank ;the shareholder is not reliable.This means they are protected and nothing of their personal possession will be taken ,therefore going to blame the directors .
  • MORE MONEY CAN BE RAISED -this is because selling shares to everyone whereas in ltd only selling shares to family and fiends and they can always say no!

Disadvantages

  • CONTROL CAN BE LOST- this is because when you're selling shares to everyone you don't have a say e.g I'm not selling it to you therefore may end up selling shares to same person every time . This means that persons percentage increases
  • COMPETITION ,WORKERS ,MANAGERS ,SHAREHOLDERS AND EVERYONE ELSE CAN SEE YOUR FINANCES- everyone knows exactly how much money you are making ,therefore when workers knows how much money you are making ,the workers then can demand pay rise also  shareholder and manger can ask for more dividends . Therefore when asking for money there can be disagreements

Evaluation

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