82101
Advantages and
disadvantages of PLC
- 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
- leads to
disagreements
- the directors may
make some decisions
that don't directly benefit
the shareholders
- shareholders
own the company
- there is a threat that
someone may buy
enough shares to take
over the comapny
- if they can convince
the shareholders to sell
- 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
- Therefore,
difficult for the
PLC to pursue
other objectives,
like helping the
environment
- Divorce of ownership and control
- Advantages
- limited liability
- can raise more
capital as a
PLC by selling
shares through
stock market
- As there are more
potential buyers
- As there are more
potential buyers
- increased capital
- company
can grow
- company can be
more diversifyed
- company
can grow
- The status of the
comapany increases
by becoming a PLC
- Therefore, banks will be more willing to lend money
- Therefore, banks will be more willing to lend money
- limited liability
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