9 Advantages of a public limited company

A public limited company is a corporate association of at least two persons which is registered with the registrar of companies and owned by shareholders who have limited liability




The word public means that the general public are welcome to buy shares in the company

The word limited means:

  • The liability of the company is limited to its total resources
  • The liabilities/ debts of shareholders are confined to the amount of capital they have invested/put in or agreed to pay in limited company

ADVANTAGES OF PUBLIC LIMITED COMPANY




  • All shareholders have limited liability
  • There is continuity of existence even after the death of an important shareholder
  • It has a separate legal status from the promoters
  • It has more capital because of more shareholders and
  • It has more borrowing capacity compared to partnership
  • More capital is raised through the sales of shares




  • Shares are sold to the public hence more capital
  • Shares are freely transferable
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