Public limited company

From Academic Kids

The initials plc after a UK or Irish company name indicate that it is a public limited company, a type of limited company, whose shares may be offered for sale to the public.

The designation plc or PLC (either form is acceptable) was introduced in the UK by the Companies Act 1980, and in the Republic of Ireland by the Companies (Amendment) Act 1983. In the Republic of Ireland, the initials "cpt" (for the Irish cuideachta phoiblí theoranta) may be used instead also, but this is rarely the case. Certain public limited companies incorporated under special legislation (mainly nationalised concerns) are exempt from carrying the letters plc or cpt.

When a new company is incorporated in either England and Wales or Scotland, it must be registered with Companies House, which is an Executive Agency of the Department of Trade and Industry. In the Republic of Ireland, the equivalent body is the Companies Registration Office, Ireland. Northern Ireland also has a Registrar of Companies.

Requirements

When forming (or creating) a PLC there must be:

  • at least £50,000 worth of share capital of which at least 25% must have been paid for.
  • two shareholders
  • two directors one of whom may also be the company secretary
  • a certificate of entitlement (the trading certificate) to do business and borrow capital

While it is not compulsory for a PLC to "float" its shares (some PLCs retain ownership of all their shares, maintaining the PLC designation for the extra financial status) many do and their shares are usually traded on either the London Stock Exchange or the Alternative Investments Market (AIM). Irish public limited companies usually trade on the Irish Stock Exchange, though many also list on the LSE, or more rarely, the AIM. Public limited companies are able to obtain more capital than other firms due to the share sales and also banks are more likely to give out loans to them as they have better credit.

See also

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