If you plan to set up a business in the UK, you can choose from various types of companies. Each of them has its advantages and disadvantages.
A savvy entrepreneur would explore the common types of legal entities in Great Britain before choosing the most suitable one for their expectations and needs. This article explores one type of UK company, a public limited company (PLC).
The main features are already in the name:
However, the latter rule has an exception: the members’ liability may go beyond the values of the shares if the PLC takes a loan, and a shareholder undertakes to see it paid back.
The current number of public limited companies registered in the UK is over 100,000, according to the latest estimates. Entrepreneurs are attracted by limited liability and a few other advantages listed below:
A British PLC should comply with several requirements:
The British law distinguishes between two types of shareholders:
It is worth mentioning that British corporate law does not have any restrictions regarding the nationality or tax residency status of shareholders and directors of a PLC.
An essential requirement to be mentioned separately is publishing annual accounts in the public domain with complete information about the profit, financial health and tax liabilities of the company.
If you plan to register a PLC, you first need to take the following steps:
Next, you would need to prepare your articles of association and a PLC memorandum:
Once you have gathered all the documents and required information, you can register your PLC online on the website of the Companies House. If you prefer to do it the old-fashioned way, download an IN01 form, print it out, fill it in, and post it to the Companies House.
However, the setting up of a plc does not end with incorporating your company in the UK. You will also need to obtain a trading certificate; it will be issued once you have provided the required proof of paying 25% of the share capital and documents showing that your company complies with all the legal requirements. You will find an application form for a trading certificate on the government website.
The UK government has been doing their utmost to facilitate the incorporation of British companies. However, despite the low fees and quick turnaround (it takes only one day!), international entrepreneurs might face significant difficulties during the registration process of their business as they are not familiar with British law.
Experienced advisors from Imperial & Legal’s London team have developed three service packages for entrepreneurs: Standard, Standard Plus, and Imperial. They help resolve most issues a prospective entrepreneur faces in the UK – from providing a registered address and assisting with opening a bank account in Great Britain to offering business consultations and providing visa assistance for your international staff.
Just as any legal entity type, a public limited company has several characteristics that can be regarded as disadvantages under certain circumstances:
Since your company shares are traded on a stock market, a competitor can become a majority shareholder in your PLC to influence the decision-making process and in the end take over your business.
Your company should first be audited to demonstrate its financial health. Afterwards, you will need to prepare and file an application to the FCA (Financial Conduct Authority).
Afterwards, your application is forwarded to the preferred stock exchange (e.g. London Stock Exchange, LSE). Once it is approved, you will need to contact an investment bank which will assist you with gathering the required documents and preparing for the IPO.
Though it might seem strange, the PLC company value can be impacted not only by its performance but also by the vulnerability of the stock exchange – both by the general trends and the negative narrative from the media and expert community. In some cases, the success of a PLC directly depends on the share value on the stock market.
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