02: Public limited companies (PLCs)

Unlike a private limited company, a public limited company can raise money to fund growth or finance product innovation by selling shares to the public on one of three UK stock markets:

• The London Stock Exchange – for large company listings.
• The Alternative Investment Market (AIM) – for smaller company listings.
• PLUS – for smaller companies wanting to raise up to £10m.

A public limited company must be registered as such and comply with stringent regulations. These include the requirement to have a share capital of at least £50,000 and to have at least two shareholders, two directors and a qualified company secretary. A newly formed PLC must not begin business or exercise any borrowing powers until it has a certificate to trade.

PLCs normally have only seven months after the end of their accounting reference period to file accounts, and they cannot take advantage of many exemptions that may apply to small private companies, such as audit exemptions.

In a public limited company, members’ liability is limited to the value of their shareholdings.