Public Limited Company

• Is a limited liability company whose shares can be bought and sold publicly on the stock exchange.
• The company is treated as a separate juristic person (legal entity) at law.
• The number of shareholders is unlimited.
• Its affairs are governed by the Memorandum and Articles of association.
• In addition to being issued with a certificate of incorporation public limited companies need to conduct an Initial Public Offering (IPO)
• after which they are issued with a certificate of trading once they are ready to trade.
• They also have a higher minimum issued capital when compared to private limited companies.
• Public limited companies are also required by law to hire external auditors at least once annually.
• Shareholders can elect a Board of Directors during the Annual General Meeting (AGM) to operate the business on their behalf.
• The name ends with the words Public Limited Company (PLC) or some other equivalent words.
• It is registered under the Companies Act
• Shareholders are free to sell their shares on the Stock Exchange

NB Visit this page to view the advantages and disadvantages of a Public Limited Company.

To access more topics go to the O Level Business Notes page.