What is a Public Limited Liabilities Company?

Public Limited Liabilities Company:

Public Limited company is also known as PLC, and the acronym PLC is used at the end of the company’s name. The PLC signifies that businesses can sell their share to the public.

The acronym PLC is used in the UK and some commonwealth countries for public listed entities, but in the USA, INC is used for public limited companies.

Key takeaways:

  • PLC is used in British companies equaling to the USA “INC.”
  • Companies listed on the London stock exchange are known as “PLC.”

The abbreviation PLC is used after the company’s name is registered on the stock exchange. It is mandatory because it communicates to the investors and other related parties that it is a public traded entity.

Examples of PLC:

  • All companies listed on the London Stock Exchange will be known as PLC, such as in Fashion Industry Burberry Group PLC, in automaker Rolls Royce PLC.
  • The Top 100 companies listed on the London Stock Exchange will be grouped in a single index known as the Financials Times Stock Exchange  100 (FSTE 100)
  • The companies included in FSTE 100 represent the whole economy of the United Kingdom.
  • The largest PLC Company by market capitalization is Royal Dutch Shell.

All PLC companies might not be listed on the stock exchange, and a company might choose not to list on the stock exchange or may not meet the stock exchange requirements.

How does a Public Limited Company Works?

PLC is a limited liability company that trades its shares in the stock exchange market, and investors (the general public) can purchase are its shares from the stock market.

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The share buyers of PLC have limited liability up to the level of their shares. Shareholders cannot be responsible for more than their worth of shares in the company, and the maximum loss for the shareholders will be the number of shares.

In the United Kingdom (UK), PLC operates along similar lines to the public corporation in the United States of America (USA).

Their operation is strictly regulated by Limited liability companies (LLC) and published for shareholders and potential investors.

The potential investors and current shareholders of the PLC can evaluate the company’s performance through published information. The regulatory authorities strictly instruct the management of PLC companies to publish true and fair information for the public.

When a PLC publishes its financial statements to the public, it is a regulatory requirement that those financial statements must be audited by Independent Auditors.  An Independent Auditor’s report is also published with the company’s financial statements.

Conclusion:

If we conclude our discussion, then public limited companies are those companies that are listed on the stock exchange and have the ability to sell their share in the stock exchange market.

The shares of Public Limited companies are available for the general public. These companies are often larger in size than public Limited Companies, but it is not necessary.

The Companies listed on stock exchanges often represent the country’s economy in the expansion of their operations. These companies have very strict legislative requirements to register themselves on the stock exchange, most companies often fail to fulfill the stock exchange requirements.

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