PLCs - Frequently Asked Questions

Q WHAT ARE THE BENEFITS OF PLC?

Status and Credibility.

Q WHAT ARE PLCs USED FOR?

Mainly high profile trading.

Q HOW IS A PLC DIFFERENT TO A LIMITED COMPANY?

A PLC must issue a minimum of 50,000 x £1 shares, and a quarter must be paid up. A limited company only need issue 1 x £1 share

Q WHAT IS THE LIABILITY THEN?

With a limited company as above the liability would only be £1 payable to creditors. With a PLC the liability would be £50,000. If 1/4 had been paid up £12,500 then the liability would be the balance, £37,500.

Q WHAT IF ALL THE 50,000 SHARES HAD BEEN PAID UP?

Then there would be no further liability, but you would have lost your £50,000.

Q CAN I PUT GOODS, EQUIPMENT OR VEHICLES INTO THE COMPANY INSTEAD OF MONEY?

Yes you can introduce capital equipment up to the value, which then becomes a company asset and you would have no further liability if it has true valuation.

Q SO IS A PLC MORE RISKY THAN LTD?

Yes if not run properly.

Q COULD I HAVE A LTD COMPANY AND A PLC?

Yes, some clients use the PLC for the trading image and the Ltd for the risk element and contractual obligations. Both companies must be run totally separately.

Q IS CREDIT EASIER TO OBTAIN?

Yes, because anyone dealing with the company knows you have assets of at least £50,000

Q DOES MY PLC HAVE TO BE FLOATED?

No, not at all, most PLCs are privately run and controlled. It is up to the Directors to float the company and issue more shares, however, most people think all PLCs are listed on the stock exchange.

Q WHAT IF SOMEONE TRIES TO BUY SHARES IN MY PLC?

See above question. They cannot unless you want them to.

Q CAN I OFFER SHARES TO THE PUBLIC TO GET INVESTORS IN?

Yes, but don't offer more than 50% or you will lose control. See point 4 of our information on share issue.