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. A private company is simpler to form than a public company. The Limited Liability Limited Partnership (LLLP), 4 Disadvantages to Limited Liability Companies. shares could be sold easily to another person via various ways). Higher status than a public limited company so will benefit from more publicity. Advantages. Limited company profits are subject to UK Corporation Tax, which is currently set at 19%. It guides a manager to be dynamic. Hence it can raise a huge amount of capital. Advantages. If you’re going public, then you’re going to be selling shares of your company. Home » Pros and Cons » 14 Pros and Cons of a Public Limited Company. Public limited companies (PLCs) are similar to private limited companies, in the sense that they are legally distinct entities with their own assets, profits and liabilities. 2. A public limited company can easily obtain financing to bankroll its operations. Advantages of a Public Limited Company Having Shares will fund expansion, allowing the business to grow. PLC enjoys huge benefits like limited liability, transferability, borrowing capacity, and others… : Limited liability, Representative management, Easy availability of capital by issuing shares to public, Seperate legal entity, Artyificual person, Company can be sue and be sued in its own name, Body corporate, High credible entity compared to other types. A sole trader and its owner are seen as one entity. Advantages Can raise more capital when compared to private limited companies Have limited liability which means they cannot lose private assets in settlement of company debts. By doi… Advertised rates on this site are provided by the third party advertiser and not by us. The concept emphasizes on competitive dynamics. A company at its crux, is an artificial person created by law. The most obvious advantage of being a public limited company is the... 2 Widening the shareholder base and spreading risk. As a limited company, you won’t have to pay Income Tax on account like you do as a sole trader. These are registered under the Companies Act, 1980 with statutory minimum capital requirements and share offered to the public subject to the conditions of limited liability. Having a public limited company will not only protect the owner's rights but it makes the ownership more flexible. There is continuity after the death of a member. All lending decisions are determined by the lender and we do not guarantee approval, rates or terms for any lender or loan program. It’s one of the most exciting events in the life of any company. Its an association of individuals having a separate legal existence, perpetual succession and a common seal. The shares can be transferred easily and getting a loan to the public sector is easy. To start with, there a quite a lot of advantages of a Private Limited Company over a Public Limited Company. There are many advantages to doing this including: If you are the director and shareholder of a limited company, you may choose to take a small salary and draw most of your income from the business in the form of dividends. ADVERTISEMENTS: This article throws light upon the advantages of a private company over a public company. In case of partnership, liability is unlimited There is no upper limit on no of owners that a public limited company can have. The Pros and Cons of Public Limited Companies. It needs two directors while a public company needs three. Minimum value of shares to be issued (in UK) is £50,000. Advantages of public limited companies. Subscribe to news about Financial Planning, Start Up Business Tips: 3 Ways to Get Financing, Choosing between Money Market Accounts and CDs, Business Start Up Help: 4 Reasons to Form an LLC. ● Easy availability of capital by issuing shares to the public, ● A company can sue and be sued in its own name, ● High credible entity compared to other types, ● Unlimited capital investment opportunities, ● More availability of capital to reinvest back into the company than non-public limited companies, ● Raising capital through public issue of shares, ● Widening the shareholder base and spreading risk, ● Pursue or gain new projects, new products or new markets, ● Grow capital expenditure to support and enhance the business, ● Make acquisitions by offering shares to the shareholders of the target business, ● Acquire funds for research and development, ● Pay off existing debt or replace existing debt with new debt on better terms, ❖ More legal formalities as compared to other forms of company, ❖ All the decisions must be taken by passing proper resolutions (ordinary or special), ❖ Maintenance of documents is more as compared to other forms, ❖ Need to have a minimum of two directors, ❖ More onerous and difficult rules applied for concerning loans to directors, ❖ A suitably qualified company secretary must be appointed, ❖ Higher transparency accounting records must be presentable within 6 months of the end of the financial year.