ZIMSEC O Level Business Studies Notes: Advantages and Disadvantages of a Public Limited Company
- Public Limited Companies have several advantages and disadvantages
- Can raise more capital when compared to private limited companies
- Have limited liability which means they cannot lose private assets in settlement of company debts.
- There is continuity after the death of a member.
- Enjoy economies of scale.
- Shareholders can freely sell their shares without consulting anyone.
- There is risk of loss of control and hostile takeovers.
- They are required to publish their accounts which may give competitors an insight into their more confidential operations.
- Decision making is complex and convoluted because a lot of shareholders have to be consulted.
- Complex formation procedures and difficult requirements for example a company has to first trade for five years before it is allowed to list of the Zimbabwe Stock Exchange.
- Are required to hire external auditors which add to the expenses of running a company.
- They suffer from Dis-economies of scale
To access more topics go to the O Level Business Notes page.