Learn: Public Limited Companies (Plc) - Features, Pros and Cons

Welcome!Great to see you back! Building on your knowledge of business types like sole traders and private limited companies, today we'll explore Public Limited Companies (Plc). These are large businesses with unique features, advantages, and disadvantages.

What is a Public Limited Company (Plc)?A Public Limited Company is a business that can sell its shares to the public on the stock exchange. This allows them to raise large amounts of capital. Plcs are often large organisations and are required to follow strict legal regulations.

Plc FeaturesPlcs have several key features:Shares can be bought and sold by the public through the stock exchange.Shareholders have limited liability, meaning they only risk the money they invest.Plcs must publish financial information annually (e.g., income statements).They require at least £50,000 in share capital to start.

Advantages of PlcsPlcs offer several benefits:They can raise large amounts of capital by selling shares to the public.Limited liability protects shareholders from losing personal assets.Plcs often have a high profile and can attract more investors.Shares are easy to transfer, making them attractive to investors.

Disadvantages of PlcsDespite their benefits, Plcs also face challenges:They must follow strict regulations, which can be expensive and time-consuming.Publishing financial information can reveal sensitive data to competitors.Original owners may lose control if others buy large amounts of shares.Risk of hostile takeovers if someone buys enough shares to control the company.

Comparing Plcs with LtdsWhile both Plcs and Ltds have limited liability, they differ in how they raise funds and operate:Plcs: Sell shares to the public; larger and more strictly regulated.Ltds: Shares are private and cannot be sold publicly; often smaller.

Review Time!You've learned about public limited companies, their features, pros, and cons, and compared them to Ltds. Let's test your understanding with some final questions!