Public Limited Company (PLC)

What Is a Public Limited Company (PLC)?

A public limited company (PLC) is a public company in the United Kingdom. PLC is the equivalent of a U.S. publicly traded company that conveys the Inc. or then again corporation assignment. The utilization of the PLC shortened form after the name of a company is mandatory and imparts to investors and to anybody dealing with the company that it is a publicly traded corporation.

How a Public Limited Company (PLC) Works

A PLC assigns a company that has offered shares of stock to the overall population. The purchasers of those shares have limited liability. Meaning, they can't be held responsible for any business losses in excess of the amount they paid for the shares.

In the U.K., a PLC works along comparative lines as a public corporation in the U.S. Its operations are regulated and it is are required to distribute periodic reports to shareholders and prospective shareholders on its true financial wellbeing.

Requirements for a PLC

U.K. company law says that a PLC must have the PLC assignment after the company name and least share capital of \u00a350,000. Like a publicly traded company in the U.S., PLCs offer different types of shares, for example, ordinary and cumulative preference shares. Ordinary shares of a PLC are like common stock issued by U.S. corporations.

Cumulative preference shares are likened to preferred stock in the U.S. Other key requirements for a PLC incorporate offering shares, selecting directors, and sticking to registration requirements. The PLC must likewise have PLC or public limited company as part of the name.

Advantages and Disadvantages of a PLC

The greatest advantage of forming a public limited company (PLC) is that it gives the ability to raise capital by giving public shares. A listing on a public stock exchange draws in interest from hedge funds, mutual funds, and professional traders as well as individual investors. That will in general lead to increased access to capital for investment in the company than a private limited company can hoard.

The biggest PLCs make up the Financial Times Stock Exchange 100 Index, known as the Footsie.

Then again, there's considerably more regulation for a PLC in the U.K., as there is for a public corporation in the U.S. They are required to hold annual comprehensive gatherings open to all shareholders and are held to higher standards of transparency in accounting. Since they're public, they're additionally defenseless against pressure from shareholders and takeover offers from rivals.

By turning into a PLC, the company is given greater access to capital, and shareholders are offered liquidity. These are comparative benefits of a company in the U.S. opening up to the world. On the downside, turning into a PLC means more investigation and required reporting. The company will have more shareholders and the value of the company could turn out to be more unstable as not entirely settled by the financial markets.

A PLC is a public company in the U.K. Meanwhile, there are private limited companies (LTDs), which are private companies in the U.K. Shares of a private limited company are not offered to the overall population.

Private companies are as yet incorporated, generally with the Companies House. These companies are as yet required to have legal records to form the business. Private companies must have somewhere around one director.

To raise capital by means of a public investment in the U.K. the company must be a PLC. PLCs are like LTDs, aside from they are publicly traded, with shares that can be uninhibitedly sold and traded on a stock exchange. Meanwhile, PLCs must have something like two directors and hold annual shareholder gatherings.

Instances of PLCs

Every one of the companies listed on the London Stock Exchange are, by definition, PLCs. The fashion retailer Burberry will be Burberry Group PLC. Automaker Rolls-Royce is Rolls-Royce Holdings PLC. The 100 biggest PLCs on the London Stock Exchange are grouped together in an index called the Financial Times Stock Exchange 100 (FTSE 100) or, conversationally, the Footsie.

The companies in this group are representative of the United Kingdom's economy as a whole. The Footsie is comparable to the Dow Jones Industrial Average (DJIA) in the U.S. The greatest PLCs by market capitalization in the Footsie, as of March 2021, included Unilever, HSBC, and AstraZeneca.

Royal Dutch Shell, HSBC Holdings, BP, GlaxoSmithKline, and British American Tobacco. The formal names of these companies incorporate the PLC assignment. Not all PLCs are listed on a stock exchange. A company might decide not to list on an exchange or may not meet the requirements for listing.

Public Limited Company (PLC) FAQs

What's the significance here to Be a Public Limited Company (PLC)?

A PLC is a publicly traded company in the U.K. These companies must have PLC or the words "public limited company" after its name. For instance, the oil and gas company, BP plc, is a U.K. publicly traded company that is settled in London, England.

Who Is a Public Limited Company Owned By?

Like publicly traded companies settled in the U.S., PLCs are owned by shareholders. These companies are traded on exchanges and shares where shares can be straightforwardly bought or sold by individuals, companies, mutual funds, and so on.

What Are the Main Features of a PLC?

The key feature of a PLC is that it's situated in the U.K. what's more, be publicly traded. The company must likewise have the PLC or "public limited company" assignment after its name.

What Is the Difference Between a Public and Private Limited Company?

A PLC is a publicly traded company, while a private limited company is likewise a U.K. company, with the exception of it is private. There are other outstanding differences between the two, for example, the way that a private limited company just must have one director, while a PLC must have two.

Primary concern

A PLC is the equivalent of an Inc. or then again corp. company that trades in the U.S. PLCs are publicly traded companies in the U.K. Numerous well known U.K.- based companies are publicly traded and have the PLC assignment after its name, for example, consumer goods company Unilever plc and drugmaker AstraZeneca plc.

Features

• The formal names of some recognizable U.K. brands like Burberry and Shell incorporate the postfix PLC.
• PLC, or public limited company, is the U.K. equivalent of the U.S. corporation or Inc.
• Each of the companies listed on the London Stock Exchange are PLCs.