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Advantages and Disadvantages of a Public Limited Company

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Added on  2020-01-07

Advantages and Disadvantages of a Public Limited Company

   Added on 2020-01-07

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Introduction to Business 1Introduction to BusinessStudent’s NameCourse Code and NameInstructor’s NameInstitution’s NameCity StateDate of Submission
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Introduction to Business 2Question 1Advantages and Disadvantages of a Public Limited Company A public limited company is defined as a company that has its securities not only traded on the stock exchange market, but whose securities can also be sold and bought by any person. Another significant characteristic of limited companies is that they are not only strictly regulated,but they are also by law required to publish their complete and genuine financial position or status in order for investors to ascertain the true or actual worth of their shares or stock. They are thus referred to as publicly held companies (Bovée & Thill, 2015). A public limited company pr PLC can also be defined as a legal designation that implies to a “limited liability company” that has offered or presented its shares to general public and which also has a limited liability. The stock of a public limited company is usually offered or presented to the general public and can beacquired by any person through an Initial Public Offering (IPO) or even through trading on the stock exchange market. Some examples of Public Limited Companies include among others BP p.l.c.Barclays PLCMarks & SpencerYahoo!Burberry group plcRolls-Royce holdings public limited company. Just like any other company, a Public Limited Company also has its own advantages and distances and examples of the advantages include but are not limited to:Viewed as a legal entity.Ability to raise large amounts of capital.
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Introduction to Business 3Free transfer of shares.The business entity is actually viewed as being a legal entity that is separate. This implies that even if one of its shareholders dies or even leaves it, the business can still continue to operate. They have the ability of raising large amounts of capital. This is attributed to the fact that they donot have a limit on the number of shareholders that they can serve. The shares of a Public Limited Company are usually transferred freely (Kumar, 2016). This is quite advantageous since it provided some form of liquidity for the shareholders.Despite the fact that a public limited company has numerous advantages, it also some disadvantages as well. Some of the disadvantages attributed to a Public limited company include but are not limited to:Lots of legal formality requirements.Lots of regulations and controls.There are numerous legal formalities that are required before a Public Limited Company is established (Halligan et al, 2015). For instance, there must exist at least two shareholders before its formation. The Secretary of the company must also be certified and it must have at least two directors.There are numerous regulations and controls that a PLC must follow to protect the public investors.
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