A Public Limited Company (PLC) is a specific type of legal business entity that offers its shares to the general public and has limited liability. It is commonly used in many jurisdictions, including the UK, India, and several other countries that follow British corporate law traditions. Here’s a detailed, professional explanation.
A Public Limited Company (PLC) is a legally incorporated business entity that is permitted to offer its shares to the public through a stock exchange or public offering. It operates under specific regulatory and disclosure requirements established by corporate and securities law.
1. Limited Liability
Shareholders' liability is limited to the amount unpaid on their shares. Their personal assets are protected in case the company incurs debts or losses.
2. Separate Legal Entity
A PLC is a distinct legal person, separate from its shareholders and directors. It can own assets, enter into contracts, sue, and be sued in its own name.
3. Share Capital Requirements
most jurisdictions require a minimum share capital to form a PLC (e.g., £50,000 in the UK, ₹5 lakh in India), part of which must be paid up before the company can commence business.
4. Public Share Offering
A PLC can raise capital by issuing shares to the public via an Initial Public Offering (IPO) and can be listed on a stock exchange.
5. Board of Directors
Management and strategic decisions are made by a board of directors, elected by the shareholders.
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