The PLC concept advocates that marketer should be aware, alert, and conscious about market trends and accordingly […] More people are likely to be aware of the company if it is public, particularly if it’s listed on a stock exchange. They may therefore miss strategic opportunities or threats, thereby not achieving the best for the business in the long-term. Designed and built with flawless clarity. ADVERTISEMENTS: Advantages: The important advantages of company form of ownership are as follows: 1. The principal reasons for trading as a limited company are limited liability, tax efficiency, and professional status. The company and its management can be sued for self-dealing, making material misrepresentations to shareholders or hiding information that federal securities laws r… It is no new business practice for business entities to op to incorporate their businesses into companies limited by shares rather than continuing to perform their duties as sole prorietorships, companies limited by guarantee, limited liability partnerships (LLP) or partnerships. Credibility and confidence are reinforced by: Again, these factors can affect the behaviour of (potential) shareholders, customers and business partners. Disadvantages of a Public Limited Company. More capital. But there are also specific features of a public limited company, many of which reinforce one another, that give it some unique advantages: The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognised exchange. This is particularly relevant if a majority of shareholders agree to a takeover bid. Ongoing Legal requirements. Let us discuss what disadvantages of Public Limited Companies the Zeus comes up with. Many organisations start of as a private limited company and later become a PLC to raise capital in order to expand and develop the company which can play a pivotal role in the competitive retail market. Where a public limited company is listed, there can be added pressure imposed by the market. This is the amount that shareholders have not paid for their shares (limited liability). Asda Is a public limited company this means that there can be some advantages and disadvantages for example an advantage of a public limited company or PLC is that it has Limited Liability which means there is a limit placed upon the amount that can be claimed. I think the term you mean is Limited Liability Company, LLC. With a private limited company, the shareholders will typically be people known to the directors or founders. Decision making is complex and convoluted because a lot of shareholders have to be consulted. That means at least £12,500 must be committed to the business, whereas in a private company a single share of (say) £0.01 could be allotted – and not even paid for on issue! The major disadvantages of a private limited company can be summarised as below:-1. The value of being able to raise finance is in how it can be employed to serve the business. There is excessive Government control over public companies. This is also known as a divorce of control. In order to trade, the plc must start with at least £50,000 of nominal share capital, at least 25% of which is paid up. The need for a proper evaluation of the advantages and disadvantages is the reason why this article will centre its approach on them to shed some more light to any party that is interested in converting to a PLC. Obtaining a trading certificate from the regulatory body. There is need for having at least two directors. This puts a lot of emphasis on the share price that causes directors to just focus on delivering short-term results thus missing out on making some strategic long term opportunities or fail to recognise threats. Going public can enhance the options for the founders to exit the business at some point in the future, if they wish to do so. This only means that the business fails to achieve the best results especially in the long run. Advantages of public limited companies. A public limited company has to follow a wide range of rules and regulations and is bound by several laws, so this results in inflexibility in its operations. The most obvious advantage of being a public limited company is the ability to publicly raise share capital, particularly where the company is listed on a recognized exchange. A PLC has a significant number of shareholders, who own a number of shares. Even more so if it's also listed on a stock exchange. A public limited company (PLC) is a type of business entity whose shares can be publicly traded via stock exchanges, but whose liability is limited. When a company sells shares, it is actually selling part of the company to the general public so it is no longer completely owned by its founders. Holding AGMs is a must unlike in private companies where decisions are often made through resolutions. Advantages and Disadvantages of Sole Proprietorship. There will be other costs associated with obtaining a listing. This gives the company a status that a private company may not quite match up to, which in turn builds the confidence of how the public view the company. The fact that there is a wide base of shareholders each holding shares, means that the risks of the company are spread to the shareholders. Therefore, if you feel unsure of your best course of action, be sure seek the wise consult of an accountant or solicitor to give you detailed information you require depending on your needs. The use of pre-emption rights can allow existing shareholders to maintain control over the company when a new share issue is undertaken, a shareholder dies or wants to transfer their shares. In this type of corporation, the members and shareholders are responsible for financial obligations to creditors in the event of formal liquidation. PUBLIC LIMITED LIABILITY COMPANY ADVANTAGES AND DISADVANTAGES ADVANTAGES OF A PUBLIC LIMITED LIABILITY COMPANY. The disadvantage of Private Limited Company. As ever, if you’re at all unsure about the best course of action, we’d strongly suggest you speak to your solicitor or accountant, who can give you detailed information and advice that takes account of your personal circumstances.

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