EnglishA Public Limited Company is a Business Structure in which investors can purchase shares. In today’s world, many businesses choose to operate as Public Limited Company because they offer certain tax advantages. This article mainly focuses on the Public Limited Company Advantages and Disadvantages.
Before going through the advantages of Public Limited Company and Disadvantages of Public Limited Company. Let’s have a quick look at “What is a Public Limited Company?”
What is a Public Limited Company?
Under the Company Act 2013, a Public Limited Company is one that has limited liability and sells shares to the public. Anyone can buy its stock, either privately through an Initial Public Offering (IPO) or publicly through stock market exchanges. A Public Limited Company is governed by tight regulations and must disclose its true financial health to its shareholders.
Disadvantages of Public Limited Company
- Lack of confidentiality
To retain shareholder trust and transparency, the corporation fully discloses to the public, making concealment impossible to sustain. Because the public is involved in decision-making, the corporation is unable to maintain confidentiality.
- Expensive Business Form
The expense of registering the corporation as a public company is enormous. A significant amount of money, time, and procedures must be followed to launch a public firm. The company’s profit is determined by the investment you make.
- Lesser Flexible as compared to other business structures
Flexibility is always a plus for any firm, but there is no such advantage in the case of a public company. Every public company is bound by rules and regulations, resulting in a lack of operational flexibility.
Conclusion
Every element has advantages and disadvantages. The benefit of the PLC (Public Limited Company) is evident to everybody; nonetheless, some public company disadvantages cannot be overlooked. Public company registration makes shares available to the public, which opens up more business options. The formation of a public company provides extra revenue potential through the sale of new shares to the public.
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