Public Limited Company: An Overview of Structure and Benefits

This essay provides a detailed overview of public limited companies (PLCs), defining them as companies whose securities are traded on the stock exchange. It outlines the legal requirements for PLCs, including the publication of financial positions and the offering of shares to the public. The essay discusses the formation process, highlighting promotion, incorporation, and subscription stages, and notes the types of stock shares a PLC can issue. Benefits such as capital raising and risk spreading are examined, alongside challenges like high regulatory measures and financial commitments. The essay concludes by referencing academic sources that support the analysis of PLC structures and operations.

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PUBLIC LIMITED COMPANY
Students Name
Public Limited Company
Course Code
Institutional Affiliation
Date

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Public limited company
A public limited company (PLC) can be referred to us the company whose securities are
traded on stock exchange and anyone has the liberty of buying and selling it. It is a legal
corporation structure that is based in the United Kingdom and it possess similar features as the
public trade company that is situated in the United States. The law has introduced mechanisms
that strictly requires that the public companies to publish their true and complete financial
positions so that the investors are able to determine the actual wealth of the shares that is also
referred to us the publicly held companies (Korom and Metzinger, 2009,125). Similarly, public
limited company is a legal designation of a limited liability company that has provides the
general public with shares due to the limited liability it possesses. Furthermore, any individual is
in a position of accessing the public limited stock that has been offered to the general public
either during the initial public offerings, through trade on the stock markets or through private
platform.
Generally, PLC requires two or more people to form it, which is a core necessity that any
other company needs and it is established by filling the articles of association that entirely
provides description of its membership, capital and purpose. Moreover, a limited company is
required to give limited grants to its shareholders and also provide a lesser portion of the grant to
the management. In order to raise the amount of capital for utilization the public company
permits its business operators to sell their share to investors. The formation of PLC involves the
following process that have to be put into consideration and includes promotion stage,
incorporation stage and lastly the subscription stage. This stages are very vital since they lead to
a formation of a desirable and affirmative PLC.
A PLC has the legal mandate to issue different kind of stock shares into the market and
may include cumulative preference shares, redeemable shares, bearer shares, preference shares

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and ordinary shares (O’Regan, 2010,297). The company shares are traded freely on the basis of
exchanges and the PLC is required by law to have a minimum share of capital and a designation
after the companies’ name.
The PLC is beneficial in terms of capital since it is able to sell shares to the public
implying that anyone is capable of investing in the company and thus a significant alternative on
where to source value funds. Additionally, it emphasizes on the aspect of risk spreading thus as a
larger proportion of people buy shares in the PLC, thus more risk is being spread out (Cuervo-
Cazurra and Genc, 2008,957). Finally, low risk rate in the PLC provides a perfect opportunity for
growth and expansion of businesses hence investing in new products and projects through money
that is obtained from the shares.
Nevertheless, the PLC faces a number of challenges that include high regulation
measures that have been put in place by the government, thus if you need your company shares
to be listed one must be able to meet strict discourse and filling requirement in the London Stock
Exchange (Bergiel, Bergiel and Balsmeier, 2008, 99). Seemingly, in order for your company to
take part in the trade they must be able to attain the minimal share capital of 50,000 Euros which
at least 25% of the cash has to be paid and therefore implying a high financial commitment.

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References
Bergiel, B.J., Bergiel, E.B. and Balsmeier, P.W., 2008. Nature of virtual teams: a summary of
their advantages and disadvantages. Management Research News, 31(2), pp.99-110.
Cuervo-Cazurra, A. and Genc, M., 2008. Transforming disadvantages into advantages:
Developing-country MNEs in the least developed countries. journal of international Business
Studies, 39(6), pp.957-979.
Korom, V. and Metzinger, P., 2009. Freedom of establishment for companies: the European
Court of Justice confirms and refines its Daily Mail Decision in the Cartesio Case C-
210/06. European Company and Financial Law Review, 6(1), pp.125-161.
O’Regan, P., 2010. Regulation, the public interest and the establishment of an accounting
supervisory body. Journal of Management & Governance, 14(4), pp.297-312.