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.
