Public Limited Company (PLC): Advantages, Disadvantages, and Requirements in 2025
A Public Limited Company (PLC) is one of the most recognisable business structures in the United Kingdom. It offers the opportunity to raise large-scale investment and enhance business credibility — but it also comes with strict regulations, governance responsibilities, and financial transparency requirements. In this guide, we will explore what a PLC is, its advantages and disadvantages, and how to decide whether it is the right structure for your business.
What Is a Public Limited Company?
A Public Limited Company (PLC) is a business that can offer its shares to the general public. Unlike a private limited company (Ltd), a PLC may list its shares on a stock exchange or sell them privately to investors. To operate legally, a PLC must have:
A minimum share capital of £50,000, with at least 25 percent paid up before starting business.
A trading certificate issued by Companies House confirming that it can commence operations.
At least two directors and a qualified company secretary.
A PLC is often chosen by larger businesses seeking external investors or planning for future growth through public funding.
Why Businesses Choose to Become a PLC
Transitioning from a private company to a public one is a major strategic step. Businesses often make this move to:
Raise significant capital through public or institutional investors.
Increase brand recognition and market credibility.
Use shares as a form of acquisition currency for mergers or partnerships.
Provide liquidity for early investors or founders wishing to realise their gains.
However, this greater access to funding and prestige comes with more complex regulatory and reporting requirements.
Advantages of a Public Limited Company
1. Access to Capital
A key benefit of becoming a PLC is the ability to raise large sums of capital by offering shares to the public. This flexibility allows businesses to fund new projects, expand into international markets, or invest in technology and innovation.
2. Enhanced Credibility
Public companies are perceived as more established and transparent. Being subject to stricter regulatory oversight often increases trust among customers, suppliers, and investors.
3. Share Liquidity
Shareholders in a PLC can easily sell or transfer their shares, providing greater flexibility for investors and making the company more attractive to institutional funds.
4. Employee Incentives
PLC status makes it easier to offer share-based incentive plans, such as employee stock options or profit-sharing schemes, which help to attract and retain top talent.
5. Growth and Expansion Opportunities
Public companies often find it easier to pursue acquisitions or joint ventures, as they can use their shares as part of the transaction.
Disadvantages of a Public Limited Company
1. Increased Costs
Operating as a PLC is significantly more expensive than a private company. The costs of regulatory compliance, auditing, legal services, and shareholder communication can be substantial.
2. Public Disclosure Obligations
PLCs must publish detailed financial reports and hold annual general meetings. Sensitive business information becomes public, which may expose the company to competitive risks.
3. Loss of Control
Once shares are publicly traded, the founders or directors may lose majority ownership and influence. Major shareholders or investors can influence key decisions.
4. Market Pressure
Public companies face continuous scrutiny from investors, analysts, and regulators. The need to satisfy quarterly or annual expectations can push management towards short-term results rather than long-term growth.
5. Regulatory Burden
PLCs must adhere to strict governance standards under the Companies Act 2006 and, if listed, to the Financial Conduct Authority’s listing rules. Non-compliance can lead to financial penalties or even disqualification of directors.
PLC vs Private Limited Company: Which Is Right for You?
A private limited company (Ltd) is more suitable for smaller businesses or startups that value control, confidentiality, and flexibility. In contrast, a PLC is designed for companies seeking substantial investment and a more formal structure. If your goal is steady growth, strategic investment, or going public in the future, a PLC may be a logical step. However, for owner-managed businesses that prefer to remain private, the costs and administrative burden of a PLC may outweigh the benefits.
How to Form or Re-register as a Public Limited Company
If you decide to establish a PLC, follow these key steps:
Choose your route – either incorporate as a new PLC or re-register your existing private company.
Ensure capital compliance – verify that your share capital meets the £50,000 minimum, with at least 25 percent paid up.
Appoint directors and a qualified company secretary – this is a legal requirement.
Apply for a trading certificate – submit Form SH50 to Companies House to begin trading legally.
Prepare corporate documents – such as the Memorandum and Articles of Association, which define shareholder rights and company structure.
Register for taxes and open a business bank account – including Corporation Tax, VAT, and PAYE as applicable.
Comply with ongoing reporting obligations – including annual accounts, confirmation statements, and shareholder disclosures.
If you plan to list your company on the stock exchange, you will also need to work with financial and legal advisors to prepare a prospectus and meet listing requirements.
Governance and Ongoing Obligations
As a PLC, your company will need to maintain strong corporate governance. This includes regular board meetings, transparent financial reporting, and adherence to shareholder rights. You must also maintain a People with Significant Control (PSC) register, file annual confirmation statements, and ensure directors comply with the Companies Act 2006. Persona Finance can assist with every stage of compliance, from setting up your governance framework to preparing statutory filings and reports.
FAQs
Can a PLC trade before getting its trading certificate? No, a PLC cannot start trading or borrow money until it has received a trading certificate from Companies House.
Does a PLC have to be listed on a stock exchange? No, a PLC can be unlisted but still offer shares to the public privately.
What is the minimum share capital requirement for a PLC? The authorised minimum is £50,000, with at least 25 percent paid up.
Can a private limited company convert into a PLC? Yes. You can re-register by passing a special resolution and submitting the required documents to Companies House.
Final Thoughts
A Public Limited Company offers prestige, capital access, and market visibility, but it also brings strict compliance requirements and increased scrutiny. Before making the transition, it is vital to assess whether the benefits outweigh the obligations.
At Persona Finance, we help businesses make informed decisions about company structure, compliance, and growth strategies. Whether you are forming a new PLC or re-registering your business, our team ensures your filings, governance, and reporting are handled with precision.
👉 Contact Persona Finance today to discuss your company incorporation or transition to a PLC.