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You are here: IGCSE Economics Private firm as producer and employer Revision Notes Public Limited company | features, advantages, disadvantages

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Public Limited company | features, advantages, disadvantages

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Public Limited company

Limited companies which can sell share on the stock exchange are Public Limited companies. These companies usually write PLC after their names. Minimum value of shares to be issued (in UK) is £50,000.

Advantages

  • There is limited liability for the shareholders.
  • The business has separate legal entity. There is continuity even if any of the shareholders die.
  • These businesses can raise large capital sum as there is no limit to the number of shareholders.
  • The shares of the business are freely transferable providing more liquidity to its shareholders .

Disadvantages

  • There are lot of legal formalities required for forming a public limited company. It is costly and time consuming.
  • In order to protect the interest of the ordinary investor there are strict controls and regulations to comply. These companies have to publish their accounts.
  • The original owners may lose control.
  • Public Limited companies are huge in size and may face management problems such as slow decision making and industrial relations problems.

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