Pros and Cons of Public Limited Company

The public limited company is a type of large business entity. It has limited liability and also offers shares to the public. It provides huge benefits to the people compared to the private limited company. The PLC shares can be purchased by anyone during trading on the stock market or initial public offers. Public Limited Company is the large scale business that consist 3 director and 7 shareholders. PLC enjoys huge benefits like limited liability, transferability, borrowing capacity, and others. Here you can look out a few pros and cons of a public limited company.

Pros of a public limited company

• Limited liability

One of the key benefits of PLC is a limited liability. If the company experienced the shocking loss for some reasons and had to discard the assets to return money to creditors then the personal assets not to be in risk. Unless anyone used the vehicle, home, jewels or other assets as collateral to borrow money for the business these items do not at risk as you run the business.

• Growth opportunity

The PLC offers growth opportunity to your business. You are providing the shares as the public limited company you gain the chance to raise the capital when you want. The share may also grow in value that the business owners hold them. It also boosts the personal worth and also supports the additional investments from both the existing as well as a new shareholder.

• Diversification

The shareholder and you get the chance to expand the portfolio of investment when you take the stock public. It is a simple way to assure that whatever wealth individuals have developed already has the great opportunity to maintain the value easily. 

• Share transferability

Another benefit of a public limited company is transferability of shares. If the shares are quoted on the shareholder, potential shareholder and stock exchange will find it simpler to transfer the shares in the organization. Without any restriction, share transferability which frequently applies in the private limited companies. It is simple to deal with different situations like shareholder death and others.

Cons of a Public Limited Company

• Need to share profits

The public limited company will be paying out general dividends to the shareholder. The business owners will pay out a maximum profit when they have taken the company public.

• Ownership problems

With the Public Limited Company, you can face the ownership problems. The shareholder should be known to the founder and director. It is difficult to control who is the company shareholder with the PLC. If you need to transfer the shares or shareholder dies then the pre-emption right uses. It allows the existing shareholder to manage control over the organization when the new share is accepted.

• More regulations

You should have at least seven shareholders and two directors of the company. You need to have the company secretary with the relevant qualifications.