Public Limited Company
WHY PUBLIC LIMITED COMPANY-
A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is benificial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.
- The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognised exchange.Since it can sell its shares to the public and anyone is able to invest their money, the capital that can be raised is typically much larger than a private limited company.
As well as share capital, a public limited company will often find itself in a better position when looking at other potential sources of finance.
The demands of being a public limited company and maintaining a stock exchange listing, for example, can help to improve a company’s creditworthiness when issuing corporate debt (and therefore reduces the return the company needs to offer investors).
- The more people that buy shares in your PLC, the more the risk is spread out.
- It's also safer than relying on one or two angel investors, as the level of influence is spread out wider amongst your many new shareholders.
- Having PLC at the end of your company's name adds prestige and grandeur to your business. Future customers, suppliers, and employees will view your business more positively if it has those letters at the end of the name. Even more so if it's also listed on a stock exchange.
- It can even lead to free publicity with the media devoting more attention to such firms.