A public limited company is a type of company that can seek a listing on the stock exchange to raise capital for expansion. It must have a minimum of £50,000 in shares that are at least 25% paid up. To register as a public limited company, the name must end in "PLC" and it must have a minimum authorized share capital of £50,000 paid up before starting business. A public limited company must have at least two members, two directors, and a secretary with the necessary knowledge. It must file audited accounts annually with the registrar.

1. A PUBLIC LIMITED COMPANY
A public limited company limited by shares, called a corporation in the U.S., is basically the same as a
private limited company in that it is a separate legal entity whose members have limited liability.
However, there are some differences. This type of company is used where it plans to seek a listing on
the Stock Exchange or where it has major plans for expansion and needs to raise the necessary capital.
There is no limit as to the number of shareholders a public limited company may have.
There are approximately 12,000 public companies in the UK, of which approximately 2,000 are listed
on the London Stock Exchange. After a successful year, the company may choose to declare a
dividend, which will be distributed accordingly among the shareholders.
Before it can start in business or borrow money, a public limited company must satisfy the Companies
Registrar that at least £50,000 worth of shares have been issued and that at least a quarter of the face
value of the shares has been fully paid up. The company will then receive an authorisation to
commence business and borrow.
In order to be a public limited company, the company must be registered as such. Otherwise it will be
construed to be a private limited company.
The registration procedure for a public limited company includes the following:
• Its memorandum must contain a clause stating that it is a public limited company and the
name must end with “plc”.
• It must have an authorised share capital of at least £50,000.
• Before it can start business, it must have allotted shares to the value of at least £50,000. Each
allotted share must be paid up to at least one quarter of its nominal value together with the
whole of any premium.
• A newly-formed public limited company must not begin business or exercise any borrowing
powers until it has a certificate issued under section 117 of the Companies Act 1985
confirming that the company has issued share capital of at least the statutory minimum. Once
issued, the certificate is proof that the company is entitled to do business and borrow.
There are four main restrictions related to this type of company:
• A public limited company must have at least two members and at least two company directors.
• The secretary must also be a person who appears to the directors to have the necessary
knowledge and ability to fulfil the functions and who fulfils certain requirements under the
Companies Act 1985.
• A public limited company is required to file its audited accounts with the Registrar. A civil
penalty will be incurred if the accounts are not filed within the time stipulated.
• A public limited company cannot take advantage of many of the provisions and exceptions
applying to private limited companies under the Act, such as audit exemptions for small
private companies.
A public limited company has access to capital markets and can offer its shares for sale to the public
through a recognised stock exchange. It can also advertise such sale publicly.