A public limited company (PLC) is a legal entity and type of UK business organization. It allows a larger class of owners find and purchase shares than the standard private limited companies. It is the most popular type of public company and most of the larger companies in the U.K. are formed as PLCs.
Unlike a private limited company (LTD), which is owned by its shareholders, a public limited company (PLC) is structured as do its name suggests and is "publicly" owned. In other words, they can be publicly traded shares on a stock exchange. According to the Companies Acts 2006 and UK Company Law, a public limited company must have a name which ends with "Public Limited Company" or "PLC". A PLC must also have an authorised share capital of £50,000 or more and must have a minimum of two shareholders.
One of the key advantages of a PLC is that it can sell additional shares to the public to raise capital, something a private limited company cannot do. This allows the PLC to grow more rapidly than the LTD which has to remain private and limited in its scope.
Additionally, PLCs tend to leverage greater independence and are subject to greater regulatory control than a private limited company. This added layer of regulation pushes a PLC to provide shareholders with more detailed information than a LTD and also brings greater external scrutiny of the company’s activities and performance.
In sum, public limited companies are a particularly popular choice for companies that want to list on the UK stock exchanges and go public. With the protection of limited liability and the ability to raise funds through the stock market, PLCs are the most popular choice for businesses that are ready to take a quantum leap in terms of growth. Those who are just starting a business should consider the advantages and disadvantages of PLC and LTD before making a decision.
Unlike a private limited company (LTD), which is owned by its shareholders, a public limited company (PLC) is structured as do its name suggests and is "publicly" owned. In other words, they can be publicly traded shares on a stock exchange. According to the Companies Acts 2006 and UK Company Law, a public limited company must have a name which ends with "Public Limited Company" or "PLC". A PLC must also have an authorised share capital of £50,000 or more and must have a minimum of two shareholders.
One of the key advantages of a PLC is that it can sell additional shares to the public to raise capital, something a private limited company cannot do. This allows the PLC to grow more rapidly than the LTD which has to remain private and limited in its scope.
Additionally, PLCs tend to leverage greater independence and are subject to greater regulatory control than a private limited company. This added layer of regulation pushes a PLC to provide shareholders with more detailed information than a LTD and also brings greater external scrutiny of the company’s activities and performance.
In sum, public limited companies are a particularly popular choice for companies that want to list on the UK stock exchanges and go public. With the protection of limited liability and the ability to raise funds through the stock market, PLCs are the most popular choice for businesses that are ready to take a quantum leap in terms of growth. Those who are just starting a business should consider the advantages and disadvantages of PLC and LTD before making a decision.