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A public limited company (legally abbreviated to PLC or plc) is a type of
public company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock ...
under
United Kingdom company law The United Kingdom company law regulates corporations formed under the Companies Act 2006 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the Parliamentary soverei ...
, some
Commonwealth A commonwealth is a traditional English term for a political community founded for the common good In philosophy Philosophy (from , ) is the study of general and fundamental questions, such as those about reason, Metaphysics, existenc ...

Commonwealth
jurisdictions, and the
Republic of Ireland Ireland ( ga, Éire ), also known as the Republic of Ireland ('), is a country A country is a distinct territorial body or political entity A polity is an identifiable political entity—any group of people who have a collective id ...

Republic of Ireland
. It is a
limited liability Limited liability is a legal status where a person's financial liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liabi ...
company whose shares may be freely sold and traded to the public (although a PLC may also be privately held, often by another PLC), with a minimum
share capital __NOTOC__ A corporation's share capitalGlossary on Trade Financing Terms - S
in the U ...
of £50,000 and usually with the letters PLC after its name. Similar companies in the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States
are called ''publicly traded companies''. Public limited companies will also have a separate legal identity. A PLC can be either an unlisted or listed company on the
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
s. In the United Kingdom, a public limited company usually must include the words "public limited company" or the abbreviation "PLC" or "plc" at the end and as part of the legal company name. Welsh companies may instead choose to end their names with , an abbreviation for '. However, some public limited companies (mostly
nationalised Nationalization, or nationalisation, is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government (disambiguation) , national government or State (polity) , state ...
concerns) incorporated under special legislation are exempted from bearing any of the identifying suffixes. The term "public limited company" and the "PLC"/"plc" suffix were introduced in 1981; prior to this, all limited companies bore the suffix "Limited" ("Ltd."), which is still used by
private limited companies A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Public company, publicly listed company, with some differences from country to country. Examples ...
.


Registration

When a new company incorporates in
England and Wales England and Wales () is a legal jurisdiction covering England and Wales, two of the four countries of the United Kingdom, parts of the United Kingdom. England and Wales forms the constitutional successor to the former Kingdom of England and follows ...

England and Wales
or in
Scotland Scotland ( sco, Scotland, gd, Alba Alba (Scottish Gaelic Scottish Gaelic ( gd, Gàidhlig or Scots Gaelic, sometimes referred to simply as Gaelic) is a Goidelic language (in the Celtic languages, Celtic branch of the Indo-European ...

Scotland
, it must register with
Companies House Companies House is the United Kingdom's registrar of companies and is an executive agency and trading fund of Government of the United Kingdom, Her Majesty's Government, falling under the remit of the Department for Business, Energy and Industr ...
, an
executive agency An executive agency is a part of a government department that is treated as managerially and budgetarily separate, to carry out some part of the executive functions of the United Kingdom government, Scottish Government, Welsh Government or Nort ...
of the
Department for Business, Energy and Industrial Strategy The Department for Business, Energy and Industrial Strategy (BEIS) is a department Department may refer to: * Departmentalization, division of a larger organization into parts with specific responsibility Government and military *Department ...
. Prior to October 2009 companies in
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label=Ulster-ScotsUlster Scots, also known as Scotch-Irish, may refer to: * Ulster Scots people The Ulster Scots (Ulster-Scots The Ulster Scots (Ulster Scots dialects, Ulster- ...

Northern Ireland
were registered with the
Northern Ireland Executive The Northern Ireland Executive is the devolved government of Northern Ireland, an administrative branch of the legislature A legislature is a deliberative assembly with the authority In the fields of sociology Sociology is the stud ...
's
Department of Enterprise, Trade and Investment The Department for the Economy (DfE, ga, An Roinn Geilleagair) is a devolved Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; Ulster Scots dialects, Ulster-Scots: ') is #Descriptions, variously described as a country, pr ...
, but since then Northern Irish company registrations are also handled by
Companies House Companies House is the United Kingdom's registrar of companies and is an executive agency and trading fund of Government of the United Kingdom, Her Majesty's Government, falling under the remit of the Department for Business, Energy and Industr ...
along with the rest of the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain,Usage is mixed. The Guardian' and Telegraph' use Britain as a synonym for the United Kingdom. Some prefer to use Britain as shorth ...

United Kingdom
.


Company directors

Formation of a public limited company requires a minimum of two directors and one secretary (differing from country to country: in India three directors are required). In general terms anyone can be a company director, provided they are not disqualified on one of the following grounds: *in the case of PLCs or their subsidiaries, the person is over 70 years of age or reaches 70 years of age while in office, unless they are appointed or re-appointed by resolution of the company in general meeting of which special notice has been given. *the person is an undischarged insolvent, subject to a Bankruptcy Restrictions Order (BRO) or Bankruptcy Restrictions Undertaking (BRU) or otherwise disqualified by a Court from holding a directorship, unless given leave to act in respect of a particular company or companies. *in England and Wales (as of October 2008; Companies Act 2006) and in Scotland (Age of Legal Capacity (Scotland) Act 1991), the person is under 16 years old.


Share capital

The members must agree to take some, or all, of the shares when th
company is registered
The memorandum of association must show the names of the people who have agreed to take shares and the number of shares each will take. These people are called the subscribers. There is a minimum share capital for public limited companies: Before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium. A company can increase its authorised share capital by passing an
ordinary resolutionIn Business law, business or commercial law in certain common law jurisdictions, an ordinary resolution is a Resolution (law), resolution passed by the stockholder, shareholders of a company (law), company by a majority, simple or bare majority (for ...
(unless its articles of association require a special or
extraordinary resolution{{refimprove, date=August 2011 In Business law, business or commercial law, an extraordinary resolution or special resolutionSome jurisdictions use both terms, but meaning slightly different things. For example, in the United Kingdom, an extraordina ...
). A copy of the resolution – and notice of the increase on Form 123 – must reach
Companies House Companies House is the United Kingdom's registrar of companies and is an executive agency and trading fund of Government of the United Kingdom, Her Majesty's Government, falling under the remit of the Department for Business, Energy and Industr ...
within 15 days of being passed. No fee is payable to Companies House. A company can decrease its authorised share capital by passing an ordinary resolution to cancel shares which have not been taken or agreed to be taken by any person. Notice of the cancellation, on Form 122, must reach Companies House within one month. No fee is payable to Companies House.


Share types

A company may have as many different types of shares as it wishes, all with different conditions attached to them. Generally share types are divided into the following categories: *Ordinary – As the name suggests these are the ordinary shares of the company with no special rights or restrictions. They may be divided into classes of different value. *Preference – These shares normally carry a right that any annual dividends available for distribution will be paid preferentially on these shares before other classes. *Cumulative preference – These shares carry a right that, if the dividend cannot be paid in one year, it will be carried forward to successive years. *Redeemable – These shares are issued with an agreement that the company will buy them back at the option of the company or the shareholder after a certain period, or on a fixed date. A company cannot have redeemable shares only.
Bearer shares A bearer instrument is a document which entitles the holder of the document to rights of ownership or title (property), title to the underlying property, such as share (finance), shares or Bond (finance), bonds. Unlike normal registered instruments, ...
are no longer possible, as they were abolished in the UK by the Small Business, Enterprise and Employment Act 2015. Any existing bearer shares had to be converted to registered shares before February 2016, or face cancellation. A PLC has access to capital markets and can offer its shares for sale to the public through a recognised stock exchange. It can also issue advertisements offering any of its securities for sale to the public. In contrast, a private company may not offer to the public any shares in itself.


Company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ...
formation


Paper process

The following documents, together with the registration fee are sent to the Registrar of Companies: ; Memorandum of Association : This sets out the company name, the registered office address and the company objects. The object of a company may simply be to carry on business as a general commercial company. The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. It is often referred to as the 'charter of a company' or 'constitution of the company'. The signatories to the Memorandum of Association are deemed to be the first Directors of the company. The Memorandum defines the relation of members with the rest of the world. ; Articles of Association : This is the document which sets out the rules for the running of the company's internal affairs. The company's articles delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature. The Articles define the inter-management, inter-member and inter-employee relationship. ; Form 1 : This gives details of the first director(s), secretary and the intended address of the registered office. As well as their names and addresses, the company's directors must give their date of birth, occupation and details of other directorships they have held within the last five years. Each officer appointed and each subscriber (or their agent) must sign and date the form. ; Form 12 : This is a statutory declaration of compliance with all the legal requirements relating to the incorporation of a company. It must be signed by a solicitor who is forming the company, or by one of the people named as a director or company secretary on Form 10. It must be signed in the presence of a commissioner for oaths, a notary public, a justice of the peace or a solicitor. There is usually a £5 fee payable to the person that witnesses the statuary declaration.


Electronic process

The key difference with the paper process is that there is no Form 12 and requirement for a statutory declaration. This significantly speeds the process and Companies House's record for an Electronic Company formation is 23 minutes. Because the electronic process requires compatible software that works with Companies House eFiling service, companies are usually formed through a Company Formation Agent.


Annual returns

Every company must deliver an annual return to Companies House at least once every twelve months. It has 28 days from the date to which the return is made up to do this. Failure to file a return is a criminal offence, for which the officers of the company may be fined. There is an annual document-processing fee of £40 if filed by paper (or £13 for users of the Electronic Filing or
WebFilings Workiva, Inc. is a global Software as a service (SaaS) company. It provides a cloud-based connected and reporting compliance platform that enables the use of connected data and automation of reporting across finance, accounting, risk, and complianc ...
services), which must be sent to Companies House with the annual return.


Conversion


Private limited company to a public limited company

Both a private company limited by shares and an
unlimited company An unlimited company or private unlimited company is a hybrid company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mix ...
with a share capital may re-register as a plc, but a company without a share capital cannot do so. A private company must pass a special resolution that it be so re-registered and deliver a copy of the resolution together with an application form to the Registrar. The resolution must also: *alter the company's memorandum so that it states that the company is to be a public limited company, *increase its share capital to the statutory minimum of £50,000, *make any other alterations to the memorandum so that it conforms to that required for a public limited company, *make any required alterations to the articles of association of the company. If it does not already have sufficient share capital, the company must issue £50,000 in shares a minimum of 25% part paid.


See also

*
European Company Statute A ''Societas Europaea'' ( ; "European Society" or "company"; plural: ; abbr. SE) is a public company registered in accordance with the European corporate law, corporate law of the European Union (EU), introduced in 2004 with the Council Regulat ...
*
Limited liability company A limited liability company (LLC) is the US-specific form of a private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Pu ...
*
Limited liability partnership A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not ...
*
Private limited company A private limited company is any type of business entity in Privately held company, "private" ownership used in many jurisdictions, in contrast to a Public company, publicly listed company, with some differences from country to country. Examples ...
*
Public company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock ...
*
S.A. (corporation) S.A. or SA designates a type of limited company In a limited company, the liability of members or subscribers of the company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, wh ...
*
United Kingdom company law The United Kingdom company law regulates corporations formed under the Companies Act 2006 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the Parliamentary soverei ...
*
Unlimited company An unlimited company or private unlimited company is a hybrid company (corporation) incorporated with or without a share capital (and similar to its limited liability, limited company counterpart) but where the legal liability of the members or ...
*
Virtual business A virtual business (short: virtubis) employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. History Amazo ...


References

{{reflist


External links


Companies Act 2006
Office of Public Sector Information The Office of Public Sector Information (OPSI) is the body responsible for the operation of His/Her Majesty's Stationery Office (HMSO) and of other public information services of the United Kingdom The United Kingdom of Great Britain and N ...

Companies House guide to company formation
Companies of the United Kingdom Types of business entity United Kingdom company law
Limited company In a limited company, the liability of members or subscribers of the company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or ...