Public limited company
Public limited company
These are the most common form of legal organization for really large businesses. They have all the advantages of a private company plus the right to advertise their shares for sale and have them quoted in the stock exchange. They can raise very large sums of public issues of shares.
This flexibility of buying and selling encourages the public to purchase the shares in the first instance and invest in businesses.
Advantages
- Limited liability
- Separate legal identity
- Continuity
- Ease of buying and selling shares for shareholders
- Access to capital sources due to the ability to issue a prospectus to the public and to offer shares for sale.
Disadvantage
- Legal formalities
- Cost of business consultants and financial advisers
- Share prices fluctuate
- Legal requirements concerning disclosure of information to shareholders and the public
- Risk of takeover
- Directors influenced by the short term objectives of major investors
