Advantages and disadvantages of PLC

Advantages and disadvantages of PLC

1. Disadvantages

   • Divorce of ownership and control
     • shareholders own the company
     • Different groups of people (the directors) control the day-to-day running of the company
       • the directors may make some decisions that don't directly benefit the shareholders
         • leads to disagreements
   • there is a threat that someone may buy enough shares to take over the comapny
     • if they can convince the shareholders to sell
   • shareholders generally want to make as much profit as possible
     • Therefore, difficult for the PLC to pursue other objectives, like helping the environment

2. Advantages

   • limited liability
   • can raise more capital as a PLC by selling shares through stock market
     • As there are more potential buyers
   • increased capital
     • company can grow
     • company can be more diversifyed
   • The status of the comapany increases by becoming a PLC
     • Therefore, banks will be more willing to lend money