What are the advantages and disadvantages of being a Public Limited Company?

ADVANTAGESBeing a PLC means that you are able to raise large amounts of funds from share holders quickly. Further to this, PLCs are able to gain credibility by being listed on the stock exchange and thus be able to gain large loans from banks. Both sources of capital will be crucial to the company in commanding, high sales, innovative products and growth. Moreover, listing as a PLC , means that production can be scaled up whilst unit costs are decreased. This is called Economies of Scale and is what allows companies to develop dominance in a market as they are able to drive competitors out of the market by offering lower prices for customers.
DISADVANTAGESBeing listed as a PLC does also have its draw backs. It means that the company is more vulnerable to takeovers. This is because the shares of the company can be bought off the stock market. Further to this, PLCs are under the scrutiny of very regimented accounting standards regulation. This can be quite complex and time consuming for companies to adhere to. If accounting standards are not on par with regulations, the company may be faced with fines and sanctions. Furthermore, company financial information is readily available when listed as a PLC, on websites such as Companies House. As well as the need to have accounts audited, they are often scrutinized by analysts and by the media. This could mean unwanted attention being brought to the companies financial position, thus, leading to speculation, short term volatility and risk.

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