public limited company

Question 1

what is a plc?

Answer 1

• PLCs are generally very large companies

• capital; must have a minimum of £50K share capital

• shares of PCs can be bought and sold on the stock exchange

• the company must register with the registrar of companies

Question 2

what are the 4 objectives of a plc?

Answer 2

• provide a service
• work within a budget
• operate ethically
• serve the local community

Question 3

what are 3 advantages of a plc?

Answer 3

• shareholders are entitled to limited liability which means they only lose their share in the company and makes it say for the company to attract investors

• shares can be sold on the stock exchange which means that large amounts of finance can be raised from individuals and institutional investors such as pension funds and insurance companies

• PLCs often dominate the market and this means they can force small organisations out of business - they can dictate market prices

Question 4

what are 3 disadvantages of a plc?

Answer 4

• PLCs are required by law to publish annual accounts which will be costly to produce. they have to publish annual reports and lodged with registrar of companies. they then get a certificate of corporation

• a large amount of legislation had to be complied with which is costly to set up. if they do not comply egalitarian action may be taken and also fined

• PLCs can grow very large employing a lot of people which can make it inflexible and difficult to manage effectively