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Public Limited Companies - Coggle Diagram
Public Limited Companies
A business could become a PLC
Shares are open for anyone to buy
Most shares in a plc are owned by
organisations rather then individuals
Shares bought and sold on the
Stock Exchanges
The business can expand at any time by selling more shares to raise finance
Limited Liability
which means the business has it sown legal status, so the owners cannot be sued
The types of business ownerships for growing businesses
A growing business may decide as its gets larger to float on the stock exchange to raise funds
This will mean the business will have to gain plc status - public limited company
Advantages of becoming a plc
Limited Liability
Easy to raise capital - issues more shares
Banks more willing to lend money to a large well - established company - less risk
Easier to grow and expand
Disadvantages of becoming a plc
Expensive:
a lot administrative work (paper work)
raise at least £50,000
Issue more information about itself - expensive to produce
Has to prepare Annual Accounts - printed and sent to all shareholders
Also make them available for general public and competitors to see, so they will know what your plans are for the business