Well over 95% of limited companies in the UK are “private” – it is by far the most common form of limited company.

The main advantages of a being public limited company are:

• Better access to capital – i.e. raising share capital from existing and new investors
• Liquidity – shareholders are able to buy and sell their shares (if they are quoted on a stock exchange)
• Value of shares – the value of the firm is shown by the market capitalisation (based on the share price)
• The opportunity to more easily make acquisitions – e.g. by offering shares to the shareholders of the target firm
• To give a company a more prestigious profile

As always there are some disadvantages to being a PLC (as opposed to remaining as a private company).  The main downsides are:

• Once listed on a stock exchange, the company is likely to have a much larger number of external shareholders, to whom company directors will be accountable
• Financial markets will govern the value of the company through the trading of the company’s shares, and will represent the market’s view of the company’s performance over time
• Greater public scrutiny of the company’s financial performance and actions

These are the main differences in summary:

1. You must use the description ‘PLC’
2. A public company must have issued share capital to a nominal value of £50,000 of which 25% must be paid up.
3. Only public companies can offer their shares to the public
4. There are strict rules that shares must be issued for full value
5. PLCs must file their accounts within 6 months from their year ends
6. PLCs must have two directors
7. PLCs must have a suitably qualified company secretary
8. PLCs must hold AGMs when the accounts can be received
9. PLCs cannot approve written resolutions unless authorised by the articles
10. There are strict regulations on PLCs purchasing or providing financial assistance to purchase their own shares
11. Traded PLCs cannot place restrictions on transfers of its shares. Otherwise such restrictions in the articles are permitted
12. Election of directors at general meetings must be in separate resolutions
13. PLCs cannot take advantage of the abbreviated accounts regime (but nor can larger Ltd Co’s)
14. Listed PLCs can hold shares in treasury (with limits)
15. Listed PLCs must have their remuneration report approved at the AGM
16. PLC directors can only have authority to issue shares for five years
17. A PLC articles cannot exclude pre-emption rights on the issue of new shares
18. PLC financial results must use International Accounting Standards if listed but unlisted Plc’s can use UK GAAP
19. Nominees of PLC shareholders where the PLC is listed on a regulated market can nominate information rights for the shareholders
20. The articles of PLCs must have a specific authority to enable the board to authorise a transaction where the director has a conflict of interest

steve@bicknells.net