Public Limited Companies - Features

Definition:

Public Limited Companies, often abbreviated as PLCs, are a specific type of business entity within the corporate sector. They have distinct features that differentiate them from private limited companies (Ltd).

Key Features:

Shares Offered to the Public:

Unlike private limited companies, public limited companies have the ability to offer shares of their business to the public. This means that shares of the company can be bought and sold by members of the public through the stock exchange.

Specific Requirements for PLC Status:

To become a PLC, a company must meet certain requirements, including:

• Having a minimum share capital of at least £50,000.
• Having a minimum of two shareholders.
• Appointing at least two directors.
• Appointing a qualified company secretary.
• Completing the necessary legal documents, including the Memorandum of Association and Articles of Association.

Large-Scale Operations:

PLCs are typically large companies with substantial resources. The requirement for a minimum share capital of £50,000 signifies the scale and financial strength of these companies.

Shares Tradable on Stock Exchange:

One of the defining features of PLCs is that their shares are publicly tradable on the stock exchange. This means that individuals and institutional investors can buy and sell shares in the company, allowing for large amounts of capital to be raised by selling shares to investors.

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Public Limited Companies-Features

Registration with the Registrar of Companies:

Similar to private limited companies, PLCs must also register with the Registrar of Companies. This process involves complying with regulatory procedures and legal documentation.

Examples

• A well-established multinational corporation, such as a major automobile manufacturer, operates as a public limited company. Its shares are listed on the stock exchange, allowing investors from around the world to buy and sell its stock.
• A technology startup with ambitious growth plans decides to transition to PLC status to access the public markets for additional funding. It must meet the minimum share capital requirement and complete the necessary legal steps to achieve PLC status.

In summary, public limited companies (PLCs) are characterized by their ability to offer shares to the public, specific requirements for PLC status, large-scale operations, publicly tradable shares on the stock exchange, and registration with the Registrar of Companies. These features make PLCs suitable for large-scale businesses seeking access to public capital markets and broader ownership opportunities.