Public Limited Companies (plcs) - your questions answered

Q:  What is a plc ?

A: It is a limited liability company whose shares may be freely sold and traded to the public. A plc’s shares may be listed on a stock exchange

Q: What are the restrictions to form a plc ?

 The key points are:

  • A public limited company requires a minimum of two directors
  • It must appoint a qualified company secretary.
  • There is a minimum share capital.  Before it can start business, it must have allotted shares to the nominal value of at least £50,000 or the prescribed Euro equivalent.  Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium on allotment.  Therefore, the persons subscribing for shares in a plc must together put in at least £12,500 before the company can commence business.
  • A new plc cannot conduct business or exercise borrowing powers unless it has obtained a trading certificate from Companies House, confirming that it has the minimum allotted share capital.

Q: Why form a PLC ?

A: If you want a company with a prestigious profile, greater access to capital or the ability to be able to advertise and sell your shares to the public, then a public limited company may be most appropriate for your needs.

In view of the more stringent capital, regulatory and reporting requirements applicable to public companies, investors and persons having dealings with public companies are likely to have more confidence in their business and structure.

Public companies are the only type of company that can raise money by selling shares to the general public.

Q: What articles of association are used for a plc ?

A: Jordans’ standard public company articles are appropriate for a privately-held public company that does not intend to seek a stock exchange listing.  Alternatively a plc can be formed with the model articles set out in schedule 3 of the Companies (Model Articles) Regulations 2008 (SI 2008/3229)) or bespoke articles which may be self-contained or incorporate some of the model articles.

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