Business Ownership - Public Limited Company (Plc) 1.5.4

Public limited company - (INCORPORATED) A public limited company ('PLC') is a company that is able to offer its shares to the public. They don't have to offer those shares to the public, but they can.

When shares are publicly traded on the public stock market, Plc companies have substantially more shareholders.

Public companies are subject to significantly greater regulation in terms of public disclosure of financial records and other information

ADVANTAGES

• Have limited liability
• Can easily raise capital by selling shares on the stock exchange, more people to buy them.
• The increased capital allows company to grow and diversify.
• The status of company increased, banks more willing to lend.

DISADVANTAGES

• The shareholders own company but directors control it, ‘divorce of ownership and control’ – the directors may make decisions that don’t directly benefit the shareholders, this can create disagreements.
• There is always threat that someone will buy enough shares to take over company
• The shareholders want to make as much profit as possible so can be difficult to pursue other objectives
• Greater public scrutiny of the company's financial performance and actions