Public Limited Companies
This is the largest form of business ownership.
Forming public limited companies is more complex and requires raising at least £50,000 of capital through sales of shares. They can sell shares to the general public. The shares are bought and sold on the stock market. They also need to produce an annual report containing financial information. Public Limited Companies are denoted by the letters PLC.
Advantages
The advantages of Public Limited Companies are that they are able to raise more capital, they are able to dominate the market due to their size and they find it easier to access finance as banks are more willing to lend to them.
Disadvantages
On the other hand, the fact that the shares can be bought by anyone can mean that someone from outside the company could buy enough of the shares to gain control of the company. It can also be expensive to set up.
Do not confuse Public Limited Companies with public sector organisations. The word ‘public’ here refers to the public sale of shares of a Public Limited Company i.e., anyone can buy shares in these companies.
Consider why a business would want to be a Public Limited Company rather than a Private Limited Company.