1.5.4 Public Limited Companies

Question 1

Public limited companies

Answer 1

A company owned by shareholders whereby the shares can be traded openly on the stock market

Question 2

Features of PLC
(MINDMAP)

Answer 2

• normally as LTD then become PLC
• Ends in plc
• run by board of directors too
• can expand by selling more shares
• shares are traded publicly through the stock market
• most shares in PLC owned by organisations rather than individuals
• People who can buy shares :
  public ,businesses, financial institutions

Question 3

Pros of PLC - 4

Answer 3

• limited liability
• huge amounts of money can be made through stock market flotation
• Easier to raise finance -> Banks willing to lend money to large well established business as less risk
• Size makes it easier to gain EOS (refer back to blue book)

Question 4

Cons of PLC -4

Answer 4

• Account of the company are public (?)
• Competitors can see accounts too -> may use information to take advantage
• Anyone can exert control if they buy enough shares - “takeover”
• Expensive + time consuming (read stock market flotation section)