Public Limited Company and its Advantages And Disadvantages 

(Last Updated On: November 22, 2022)

A public limited company (PLC) is a legal entity with a publicly traded limited liability. It has a share capital that can be raised through the sale of shares and a board of directors that governs the company’s operations.

Advantages of Limited Company

The advantages and disadvantages of plc is that it is open to everyone. Anyone can buy into it. It is also very flexible. There is no limit on the amount of money a person can invest in it. They can also sell their shares at any time.

Raising Capital Through Public Issue Of Shares

The public issue of shares is a great way to raise capital. This method can be used in many different types of businesses. It can be used for both small and large companies.

Widening The Shareholder Base And Spreading Risk

If a company has financial problems, the shareholders will take a hit. Still, if the company is successful, the shareholders will benefit.

Other Finance Opportunities

Public companies have certain advantages over private companies. The first advantage is that they can raise more money. This is because the shareholders of public companies are the public. They can invest in the company if they wish. The second advantage is that public companies are subject to greater scrutiny from regulators and the public. The third advantage is that public companies can offer a broader range of financial instruments.

Growth And Expansion Opportunities

Public companies are much more regulated than private companies. They are also more subject to government regulation. They have to file reports with the government and pay taxes. They are not allowed to discriminate against anyone based on race, religion, gender, etc.

Prestigious Profile And Confidence

Public companies are seen as prestigious because they are publicly traded. They are also seen as prestigious because they give the public confidence in your company. The stock market is one of the most efficient ways of raising capital.

Transferability Of Shares

Public companies are usually traded on stock exchanges. This is where you can buy and sell shares in the company. The public can also purchase shares in the company through investment funds, pension funds, or even individual investors.

Exit Strategy

If you want to sell your shares, you must file a notice with the SEC and wait for a few days. After this, the company’s shareholders can buy your shares at a price determined by the market. You can sell your shares for more or less than what you bought them.

The first advantage of a public limited company is that it is open to everyone. Anyone can buy into it. They can buy shares in the company and get involved with the business as shareholders.

A limited company is an excellent way for a group to form a business. It is also very flexible. You can raise funds before you start the business. If you need money for a project, you can get it from the investors in the company.

It is also straightforward to start a limited company. You can meet the minimum purchase amount. You have to fill out the necessary documents, and then you can start selling products or services to the public.

You can sell to as many customers as you want. This is why many new companies form a public limited company.

The second advantage of a public limited company is that it is flexible. A person can invest as much money as they want in the company.

There is no limit on how much money a person can invest. In fact, the total investment can be unlimited. A person can sell their shares whenever they want.

They can sell their shares to someone else if they find a better deal. A person can even sell their shares to the company.

Disadvantages of Limited Company

The disadvantage of a public limited company is that it is owned by shareholders, and they have a say in the direction and policies of the company. Also, it is pretty expensive to start a PLC. This is the best option if you want to know how to create your own public limited company.

More Regulatory Requirements

The company’s directors must act in the company’s and its shareholders’ best interests. They must ensure that the company is managed efficiently and the accounts are kept promptly.

Higher Levels Of Transparency Required

In the UK, the rules governing the disclosure of company accounts are much more rigorous than in the USA. All companies must publish statements to the Companies House annually in the UK. The funds must be audited by an independent accountant. They must be filed electronically, and the public can access these accounts online.

Ownership And Control Issues

A public company has no restrictions on who can become a shareholder. Anybody can buy into a public company. This means that the company must be transparent about what it does. Shareholders are entitled to know everything that the company does. The shareholders are usually known to the directors or founders if a company is private. The public company will be selective a person about who to let become a shareholder, ensuring they support the business’s vision and plans. When new shares are issued, pre-emption rights allow existing shareholders to maintain control over the company.

If the company is public, the shareholders can see how much each director or shareholder makes. They can also see how much each director or shareholder spends on the company. Suppose they see that one director or shareholder is spending too much money on things that aren’t related to running the company. In that case, they may try to remove them from their position. In addition, if the company isn’t making any money, the shareholders may try to force the directors to sell the company.

When an institutional investor buys a company, it usually means that he wants to become a part owner. He will have to follow the company’s bylaws and policies. This can also mean he will have more say in how the company is run. He will also have to work with other shareholders and directors.

More Vulnerable To Takeovers

This is a big problem for public limited companies because other companies can take them over. The board of directors must protect the company from such takeovers to avoid this. The board can set up a special committee to review all takeover proposals. This committee should decide if the seizure is good for the company and its shareholders.


It would be best if you thought about improving your company’s performance. It would be best if you always looked for ways to enhance your company’s performance. If you do this, you will gain opportunities to make money. 

You can also get more customers by making your company more efficient. You can do this by reducing your costs or by increasing your sales. 

You can also increase your profits by improving the quality of your products or services. You can also enhance your company’s performance by creating better technology or expanding your customer base.

Initial Financial Commitment Is Higher

The IPO is usually done through “flotation” or “going public.” This means that the company will sell a certain number of shares, which will be done at a specific price. An IPO is an excellent way to raise money for the company. 

It is also great to share the company’s growth with investors. The company can use the money to buy new equipment and hire new staff. The IPO is also a great way to attract more people to the company. 

Being a public limited liability company provides a legal structure that allows a business to raise capital from investors and protects them against personal liability. If the business is sued, the directors and shareholders cannot be held personally liable for any damages.


Public Limited Companies are companies that are publicly traded. The shares of the company are sold to the public. The company is publicly traded and listed on the stock exchange.