A public limited company (legally abbreviated to plc) is a type of
public company under the
3.1 Share types
3.2.1 Paper process 3.2.2 Electronic process
3.3 Annual returns
Private limited company
5 See also 6 References 7 External links
When a new company incorporates in
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 bankrupt, 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.
The members must agree to take some, or all, of the shares when the
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 resolution (unless its articles of association require a
special or extraordinary resolution). A copy of the resolution – and
notice of the increase on Form 123 – must reach Companies House
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
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 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
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.
See also: Electronic process of law
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
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
^ Longman Business English Dictionary
^ "s. 58(2) Companies Act 2006". Legislation.gov.uk. Retrieved
^ "Companies Bill defines 'insider': legislation is expected by the
summer", The Times, 20 December 1973
^ "Applying to become bankrupt: Restrictions - GOV.UK".
Companies Act 2006, Office of Public Sector Information