A public limited company (PLC) is the legal designation of a limited liability company (LLC) which has offered shares to the general public and has limited liability. A PLC’s stock is offered to the general public and can be acquired by anyone, either privately, during an initial public offering or through trades on the stock market.
1) Raising capital through the Public issue of shares
The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognized exchange.
2) Widening the shareholder base and spreading risk
As well as share capital, a public limited company will often find itself in a better position when looking at other potential sources of finance.
3) Growth and expansion opportunities
The value and chances of being able to raise finance is in how it can be employed to serve the business. By having more finance potentially more readily available and on better terms than a private company, the public limited company can be in an advantageous position to:
4) Pursue or gain new projects, new products or new markets
5) Grow capital expenditure to support and enhance the business
6) Make acquisitions (whether in cash or by offering shares to the shareholders of the target business)
7) Acquire funds for research and development
8) Pay off existing debt (or replace existing debt with new debt on better terms)
9) Exit Strategy
Going public can enhance the options for the founders to exit the business at some point in the future if they wish to do so. Both higher transferability of shares and the increased visibility of the business and its performance may increase the chances of bid interest from potential suitors.