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
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Public Limited Companies
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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
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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
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Difference between Public Limited Companies and Partnerships
Public Limited Companies
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Partnerships
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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
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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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