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Public Limited company

Limited companies which can sell share on the stock exchange are Public Limited companies. These companies usually write PLC after their names. 

Advantages

  • There is limited liability for the shareholders.
  • The business has separate legal entity. There is continuity even if any of the shareholders die.
  • These businesses can raise large capital sum as there is no limit to the number of shareholders.
  • The shares of the business are freely transferable providing more liquidity to its shareholders .

Disadvantages

  • There are lot of legal formalities required for forming a public limited company. It is costly and time consuming.
  • In order to protect the interest of the ordinary investor there are strict controls and regulations to comply. These companies have to publish their accounts.
  • The original owners may lose control. 
  • Public Limited companies are huge in size and may face management problems such as slow decision making and industrial relations problems.

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