Public Limited Liabilities Company:
Public Limited company is also known as PLC and the acronym PLC is used at the end of the name of the company. The PLC signifies that business can sales the 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.
- PLC is used in British companies which are equaling to the USA “INC”.
- Companies listed in the London stock exchange are known as “PLC”.
The abbreviation PLC is used after the name of the company which is registered on the stock exchange and 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 in the London Stock Exchange will be grouped together in a single index knowing as 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, a company might choose to not list on the stock exchange or may not meet the stock exchange requirements.
How a Public Limited Company Works?
PLC is a limited liability company that trades its shares in the stock exchange market and investors (general public) can purchase are its shares from the stock market. 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 in similar lines for 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 performance of the company 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 regulatory requirements that those financial statements must be audited by Independent Auditors. An Independent Auditor’s report is also published with the financial statements of the company.
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 in stock exchanges often represent the economy of the country to the expansion of their operations. These companies have very strict legislative requirements to registers themselves on the stock exchange, most companies often fail to fulfill the stock exchange requirements.