Public limited companies

  • Created by: EReynolds
  • Created on: 12-06-15 22:17

Private limited companies

A private limited company that wants to raise a large amount of capital may do so by beocming a public limited company.

Private limited companys are usually shorted to 'ltd'.

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Public limited company

Public limited company are usually shortened to 'plc'.

Becoming a plc is neither expensive nor complicated; it involves producing evidence that the business is in good health and reliable.


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Public limited company

Becoming a plc allows the business to offer shares for sale on the stock exchange. Is is a good way to raise large amounts of finance.

However,a a stock exchange listing means anyone can buy shares-including people or orgainisations that may put their own interests above those of the business.

Competitors who buy shares have information about the businesses, but also have a say in how ut us organised or operated. Public shareholders are often more interested in gaining a quick profit than in the long-term health of the business, so they may buy and sell shares regardless of the strength of the business. This can be a drawback for the plc.

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Public limited company

Plc's also have to publish annual accounts and make them accesible to anyone who requests them. This means that their strengths and weaknesses can easily be seen, even by competitors.

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Shareholders each have a vote (one per share), so they can affect the decision- making progress of the business at the aunnual general meeting of the company.

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