Advantages and disadvantages of PLC

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Mind Map on Advantages and disadvantages of PLC, created by shainu on 10/05/2013.
shainu
Mind Map by shainu, updated more than 1 year ago
shainu
Created by shainu about 12 years ago
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Advantages and disadvantages of PLC
  1. Disadvantages
    1. Divorce of ownership and control
      1. shareholders own the company
        1. Different groups of people (the directors) control the day-to-day running of the company
          1. the directors may make some decisions that don't directly benefit the shareholders
            1. leads to disagreements
        2. there is a threat that someone may buy enough shares to take over the comapny
          1. if they can convince the shareholders to sell
          2. shareholders generally want to make as much profit as possible
            1. Therefore, difficult for the PLC to pursue other objectives, like helping the environment
          3. Advantages
            1. limited liability
              1. can raise more capital as a PLC by selling shares through stock market
                1. As there are more potential buyers
                2. increased capital
                  1. company can grow
                    1. company can be more diversifyed
                    2. The status of the comapany increases by becoming a PLC
                      1. Therefore, banks will be more willing to lend money
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