 INVESTING

 SIMULATOR
 ECONOMY
 PERSONAL FINANCE
 NEWS
 REVIEWS
 ACADEMY

TRADE

Table of Contents

 What Is a Public Limited Company (PLC)?

 How a PLC Works
 Requirements for a PLC
 Pros and Cons
 PLC vs. LTD
 How to Invest in a PLC
 Examples of PLCs
 PLC FAQs
 The Bottom Line

 BUSINESS  
 TYPES OF CORPORATIONS

What Public Limited Company (PLC)

Means in the U.K.
By 
MARSHALL HARGRAVE
 

Updated July 21, 2022

Reviewed by 
THOMAS BROCK
Fact checked by 
RYAN EICHLER
Investopedia / Paige McLaughlin

What Is a Public Limited Company (PLC)?

A public limited company (PLC) is a public company in the United Kingdom. PLC is the
equivalent of a U.S. publicly traded company that carries the Inc. or corporation designation.

The use of the PLC abbreviation after the name of a company is mandatory and communicates to
investors and to anyone dealing with the company that it is a publicly traded corporation.

KEY TAKEAWAYS

 PLC, or public limited company, is an abbreviation for public companies in the U.K.
 All of the companies listed on the London Stock Exchange are PLCs.
 Any retail investor may buy stock in a PLC.
 Unlike privately-held companies, public companies must publish certain financial data
and disclosures for the public at regular intervals.
 The formal names of some familiar U.K. brands like Burberry and Shell include the
suffix PLC.

How a Public Limited Company (PLC) Works

A PLC designates a company that has offered shares of stock to the general public. The buyers of
those shares have limited liability, meaning that they cannot be held responsible for any business
losses in excess of the amount they paid for the shares.

In the U.K., a PLC operates along similar lines as a public corporation in the U.S. Its operations
are regulated and they are required to publish periodic reports to shareholders and prospective
shareholders on its true financial health.

Requirements for a PLC

U.K. company law says that a PLC must have the PLC designation after the company name and
minimum share capital of £50,000. Like a publicly traded company in the U.S., PLCs offer
various types of shares, such as ordinary and cumulative preference shares. Ordinary shares of a
PLC are similar to common stock issued by U.S. corporations.

Cumulative preference shares are akin to preferred stock in the U.S. Other key requirements for a
PLC include offering shares, appointing directors, and adhering to registration requirements. The
PLC must also have PLC or public limited company as part of the name.1 

Advantages and Disadvantages of a PLC

The biggest advantage of forming a public limited company (PLC) is that it grants the ability to
raise capital by issuing public shares. A listing on a public stock exchange attracts interest from
hedge funds, mutual funds, and professional traders as well as individual investors. That tends to
lead to increased access to capital for investment in the company than a private limited company
can amass.

 
The largest PLCs make up the Financial Times Stock Exchange 100 Index, known as
the Footsie.

On the other hand, there's much more regulation for a PLC in the U.K., than there is for a public
corporation in the U.S. They are required to hold annual general meetings open to all
shareholders and are held to higher standards of transparency in accounting.2 Because they’re
public, they’re also vulnerable to pressure from shareholders and takeover bids from rivals.

By becoming a PLC, the company is given greater access to capital, and shareholders are offered
liquidity. These are similar benefits of a company in the U.S. going public. On the downside,
becoming a PLC means more scrutiny and required reporting. The company will have more
shareholders and the value of the company could become more volatile as it is determined by the
financial markets. 

Pros
 U.K. companies can raise more capital by being a PLC.
 Becoming a PLC allows shareholders liquidity.
 Increased ability to raise future capital and make acquisitions (by offering shares to target
companies).

Cons
 Increased scrutiny and regulation
 Larger number of shareholders to be accountable to
 Volatility in valuation increases as the company is beholden to financial markets.

Public Limited Company (PLC) vs. Private Limited

Company (LTD)
A PLC is a public company in the U.K. Meanwhile, there are private limited companies (LTDs),
which are private companies in the U.K. Shares of a private limited company are not offered to
the general public. 

Private companies are still incorporated, generally with the Companies House. These companies
are still required to have legal documents to form the business. Private companies must have at
least one director. 

To raise capital via a public investment in the U.K. the company must be a PLC. PLCs are like
LTDs, except they are publicly traded, with shares that can be freely sold and traded on a stock
exchange. Meanwhile, PLCs must have at least two directors and hold annual shareholder
meetings.3

How to Invest in a PLC

As public companies, any retail investor in the United Kingdom can buy shares in a PLC. The
simplest way to do so is through a brokerage: The investor can simply create an account, transfer
money, and buy shares of the company. It is also to buy shares through a retirement account, so
some people may own PLC shares without even knowing about it.

This may be more complicated for investors outside the United Kingdom. Many U.S. brokerages
allow their clients to directly buy shares in foreign markets, exchanging dollars into local
currency to make the purchase. In addition, many U.K. companies are tradable in American
markets in the form of American depositary receipts. The downside is that the investor would
assume an additional level of currency risk.4

Examples of PLCs
All of the companies listed on the London Stock Exchange are, by definition, PLCs. The fashion
retailer Burberry is Burberry Group PLC. Automaker Rolls-Royce is Rolls-Royce Holdings
PLC. The 100 largest PLCs on the London Stock Exchange are grouped together in an index
called the Financial Times Stock Exchange 100 (FTSE 100) or, colloquially, the Footsie.

The companies in this group are representative of the United Kingdom's economy as a whole.
The Footsie is comparable to the Dow Jones Industrial Average (DJIA) in the U.S. The biggest
PLCs by market capitalization in the Footsie, as of July 2022, included Shell, HSBC, and
AstraZeneca.5

The formal names of all of these companies include the PLC designation. Not all PLCs are listed
on a stock exchange. A company may choose not to list on an exchange or may not meet the
requirements for listing.

What Does It Mean to Be a Public Limited Company

(PLC)?
A PLC is a publicly traded company in the U.K. These companies must have PLC or the words
"public limited company" after their name. For example, the oil and gas company, BP plc, is a
U.K. publicly traded company that's headquartered in London, England.

Who Is a Public Limited Company Owned By?

Like publicly traded companies headquartered in the U.S., PLCs are owned by shareholders.
These companies are traded on exchanges where shares can be openly bought or sold by
individuals, companies, mutual funds, etc.
What Are the Main Features of a PLC?
The key feature of a PLC is that it's based in the U.K. and is publicly traded. The company must
also have the PLC or "public limited company" designation after its name.

What Is the Difference Between a Public and Private

Limited Company?
A PLC is a publicly traded company, while a private limited company is also a U.K. company,
except it is private. There are other notable differences between the two, such as the fact that a
private limited company only has to have one director, while a PLC must have two.

The Bottom Line

A PLC is the equivalent of an Inc. or Corp. company that trades in the U.S. stock market. PLCs
are publicly traded companies in the U.K. Many famous U.K.-based companies are publicly
traded and have the PLC designation after their name, such as consumer goods company
Unilever plc and drugmaker AstraZeneca plc.

SPONSORED
Access to World-Class Learning From Top Universities
Are you interested in developing skills related to banking, investment management, or other
fields related to finance? Browse hundreds of online certificate programs the world’s leading
universities offer in partnership with Emeritus. From core fundamentals to the latest research
studies, you’ll find a range of courses taught by industry experts. Learn more about developing
future-ready skills and get started.
ARTICLE SOURCES
Related Terms
What Does Ltd. (Limited) Mean After a Business Name?
Ltd. is an abbreviation for "limited," a type of incorporation used in the United Kingdom,
Ireland, Canada and other Commonwealth countries.
 more
GmbH: Definition, Requirements, and Comparison to LLCs
GmbH is an abbreviation of the German phrase “Gesellschaft mit beschränkter Haftung,” which
means “company with limited liability.”
 more
Limited Company (LC): Definition, Meaning, and Variations
A limited company (LC) is a form of incorporation that limits the amount of liability undertaken
by the company's shareholders.
 more
What Is Stock Trading?
Stock trading involves buying and selling shares of publicly traded companies. It typically
happens in the United States on exchanges like the New York Stock Exchange (NYSE) or the
Nasdaq stock market.
 more
London Stock Exchange (LSE): Definition, History and Major Events
The London Stock Exchange (LSE) is the main stock exchange in the United Kingdom. The LSE
provides access to electronic trading for thousands of stocks.
 more
Special Purpose Acquisition Company (SPAC) Explained: Examples and Risks
A special purpose acquisition company (SPAC) is a publicly traded company created for the
purpose of acquiring or merging with an existing company.
 more
Partner Links
Related Articles

INTERNATIONAL MARKETS
What Types of Shares Can Public Limited Companies Issue?
INVESTING REGULATIONS
What are the requirements for being a Public Limited Company?

STOCK MARKETS
The NYSE and Nasdaq: How They Work
INDEX TRADING STRATEGY
S&P 500 vs. Russell 1000: What's the Difference?
IPOS
10 of the Most Famous Public Companies That Went Private

INVESTING BASICS
Who Owns the Stock Exchanges?

 Facebook
 Instagram
 LinkedIn
 Newsletter
 Twitter
  About Us
 Terms of Use
 Dictionary
 Editorial Policy
 Advertise
 News
 Privacy Policy
 Contact Us
 Careers

 #
 A
 B
 C
 D
 E
 F
 G
 H
 I
 J
 K
 L
 M
 N
 O
 P
 Q
 R
 S
 T
 U
 V
 W
 X
 Y
 Z

Investopedia is part of the Dotdash Meredith publishing family.