advantages of public limited company, 7 Advantages

advantages of public limited company, 7 Advantages

7 Advantages of Public Limited Company You Should Know


Are you thinking of starting a public limited company? A public limited company, or PLC, is a type of business entity that can sell its shares to the public and has limited liability. PLCs have many benefits that can help you grow your business and achieve your goals. In this article, we will discuss 7 advantages of public limited company that you should know.


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Access to capital.

One of the main advantages of public limited company is that it can raise funds from a large pool of investors. By selling shares to the public, a PLC can access more capital than a private company, which can only rely on its owners or a few investors. This can help a PLC to finance its expansion, research and development, or acquisition plans.

Liquidity.

Another advantage of public limited company is that it provides liquidity for its shareholders. Liquidity means the ease with which an asset can be converted into cash. Since the shares of a PLC are traded on a stock exchange, the shareholders can sell their shares at any time and receive cash quickly. This also attracts more investors who prefer liquid assets.

Prestige and reputation.

A third advantage of public limited company is that it enhances its prestige and reputation in the market. A PLC is subject to more regulations and disclosure requirements than a private company, which means it has to maintain high standards of transparency and accountability. This can boost the confidence and trust of the customers, suppliers, creditors, and employees of the PLC.

Transferability of shares.

A fourth advantage of public limited company is that it allows the transferability of shares. This means that the shareholders of a PLC can transfer their shares to anyone without the consent of other shareholders or the management. This gives the shareholders more flexibility and freedom to exit or enter the business as they wish.

Perpetual existence.

A fifth advantage of public limited company is that it has a perpetual existence. This means that the PLC does not cease to exist even if its owners die or leave the business. The PLC continues to operate as a separate legal entity until it is dissolved by law or by its shareholders. This ensures the continuity and stability of the business.

Limited liability.

A sixth advantage of public limited company is that it offers limited liability to its shareholders. Limited liability means that the shareholders are only liable for the amount they have invested in the business and not for its debts or obligations. This protects the personal assets of the shareholders from being seized by creditors in case the PLC goes bankrupt or faces legal issues.

Tax benefits.

A seventh advantage of public limited company is that it enjoys some tax benefits compared to other types of businesses. For example, a PLC can deduct some expenses such as interest payments, dividends, and depreciation from its taxable income, which reduces its tax burden. A PLC can also benefit from tax credits, exemptions, or incentives offered by the government for certain sectors or activities.

These are some of the advantages of public limited company that you should know if you are planning to start or convert your business into a PLC. A PLC can help you grow your business, attract more investors, improve your reputation, and enjoy some tax benefits. However, a PLC also has some disadvantages and challenges that you should be aware of before making your decision.


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Advantages of Public Limited Company

Public limited companies, or PLCs, are a common type of company in the UK that sell shares of stock to the public. There are many advantages of being a public limited company, such as:

  • Better access to capital. A public company can raise money by issuing shares to the public. It can also get a loan from a bank or other financial institution by pledging its assets as collateral.
  • Reduced investment risk. Offering shares to the public gives the opportunity to spread the risk of company ownership among a large number of shareholders. This may allow early investors in the company to sell some of their own shares at a profit while still retaining a substantial stake in the company.
  • Greater public confidence. A public company is subject to more strict operating regulations and increased scrutiny than a private company. This may enhance its reputation and credibility among customers, suppliers, investors and other stakeholders.

Global Demand for Public Limited Companies

The global demand for public limited companies may vary depending on the industry, market conditions, consumer preferences and other factors. However, some general trends can be observed, such as:

  • Increasing demand for technology and innovation. Public limited companies in the technology sector may benefit from the growing demand for digital products and services, such as e-commerce, cloud computing, artificial intelligence and cybersecurity. These companies may have an advantage over private companies in accessing capital and talent to fund their research and development.
  • Decreasing demand for fossil fuels and traditional industries. Public limited companies in the fossil fuel and traditional industries may face challenges from the declining demand for their products and services, due to environmental concerns, regulatory pressures and competition from renewable energy sources. These companies may have to adapt their business models and strategies to survive and thrive in the changing market.

References:

http://www.legislation.gov.uk/ukpga/2006/46/section/58

https://dx.doi.org/10.1016/j.chb.2019.02.012

https://www.gov.uk/bankruptcy/restrictions

https://www.investopedia.com/terms/p/plc.asp

https://www.businessnewsdaily.com/15142-public-limited-company.html

https://www.thebalancesmb.com/what-is-a-public-limited-company-4582270



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