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Public Limited Companies


Features of Public Limited Companies
v  Must use the word “Public Limited Company” or “PLC” after its name
v  Can invite the general public to buy its shares and debentures
v  Can transfer its shares freely
v  Must have a minimum of two shareholders
v  Must have at least two directors
v  Must have a trading certificate to commence trading

Advantages
v  Shareholders have limited liability
v  Large amount of capital is possible
v  It can invite the general public to buy its shares and debentures
v  Shares can be transferred freely
v  Death of a shareholder does not affect the life of the company

Disadvantages
v  It is difficult to manage the larger PLCs
v  Formation is complicated and costly
v  Annual accounts must be published. There can be little secrecy and privacy
v  It must have a minimum of two directors
v  Shareholders have a little control over the management
v  It has to comply with many government rules and regulations

Differences between Public Limited Companies and Private Limited Companies

Private Limited Companies
Public Limited Companies
v  It must use the word ‘Ltd’ after its name
v  It can have a minimum of one director
v  It can not transfer its shares freely
v  It can not invite the general public to buy its shares
v  Need not to have a trading certificate
v  Relatively less formalities
v  Need not to publish its annual accounts
v  It must use the word ‘Plc’ after its name
v  It must have a minimum of two directors
v  It can transfer its shares freely
v  It can invite the general public to buy its shares
v  It must have Trading Certificate
v  More formalities
v  Must publish its annual accounts

Difference between Public Limited Companies and Partnerships

Public Limited Companies
Partnerships
v  Shareholders have limited liability
v  There is no limit on the maximum number of shareholders
v  Companies are regulated by the Companies Act of 1980
v  It is managed by the board of directors
v  Companies have a separate legal existence
v  A large amount of capital is possible
v  A Plc must be incorporated
v  Ordinary partners have unlimited liability
v  The maximum number of partners is 20. Service sector is exceptional.
v  Partnerships are regulated by the UK Partnership Act of 1890
v  It is managed by partners themselves
v  Partnerships do not have a separate legal entity
v  Relatively less capital can be raised
v  It is not required to incorporate the firm

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