What is a Public Limited Company? Definition and key features
A Public Limited Company (PLC) is a type of limited company that’s allowed to offer its shares to the public. It’s designed for businesses operating at significant scale, and it comes with much stricter regulations than other structures (such as a Private Limited Company).
In practical terms, becoming a PLC means opening the business up to public investment, public scrutiny, and formal governance requirements. As such, decisions are no longer just about what works internally; they must also meet the expectations of shareholders, regulators, and the wider market.
Here are the key features of a PLC and what they mean for the day-to-day running of your business.
Separate legal entity
A PLC exists as a separate legal entity from the people who own or manage it. This means the company can enter contracts, own assets, and take responsibility for its finances in its own name.
This structure provides limited liability. If the company faces financial difficulty, responsibility usually sits with the business itself rather than with individual shareholders.
Public shares
A defining feature of a PLC is the ability to raise capital by offering shares to the general public.
This allows companies to access large pools of funding to support expansion, major projects, or international growth. At the same time, public ownership brings greater oversight. Financial performance, leadership decisions, and long-term strategy are all subject to public and shareholder scrutiny.
Public share ownership is therefore best suited to businesses with strong financial foundations and the capacity to operate transparently at scale.
Company name
By law, a Public Limited Company must include “PLC” or “Public Limited Company” at the end of its registered name.
This signals to investors, customers, and regulators that the business is publicly owned and subject to a higher level of regulation and disclosure.
What are the requirements for forming a PLC in the UK?
Forming a Public Limited Company comes with stricter rules than most other business structures. These requirements are designed to protect both shareholders and the wider public, and they set a high bar for entry.
Here’s an overview of the most important PLC requirements in the UK:
Requirement | What this means in practice |
|---|
| A PLC must have at least two directors. At least one director must be a natural person, meaning a real individual rather than another company. |
Qualified company secretary | Unlike a Private Limited Company, a PLC must appoint a company secretary. This person must be suitably qualified, such as an accountant or a chartered company secretary. |
| A PLC must have a minimum share capital of £50,000. At least 25% (£12,500) must be paid up before the company can begin trading. |
| Before starting business activities, a PLC must obtain a trading certificate from Companies House confirming that these requirements have been met. |
These rules reflect the level of responsibility that comes with public ownership. They also explain why forming a PLC is usually a later stage decision, taken only once a business has the scale, structure, and financial strength to support it.
Good to know: The minimum share capital for a PLC (£50,000) comes from shareholders in exchange for shares. It’s typically paid into the company’s business bank account and can be used to support operations and growth.
The advantages and disadvantages of a PLC
A Public Limited Company can unlock opportunities that are simply not available to smaller business structures. But with that, it places far greater demands on the business and the people running it.
Before you take the leap, it’s essential to understand both the pros and cons. Here they are at a glance, followed by a more detailed exploration of what they mean in practice.
Advantages of a PLC: | Disadvantages of a PLC: |
|---|
Access to large-scale funding — ideal for growth and expansion | Stricter regulatory requirements and tighter reporting deadlines |
A more prestigious image — helps to increase credibility and trust among potential lenders, partners, and customers | Higher transparency comes with greater public scrutiny |
Easier transfer of shares and ownership for greater flexibility | Risk of hostile takeovers |
Advantages of a PLC
Access to large-scale funding
The biggest advantage of a PLC is the ability to raise significant capital by selling shares to the public. This can fund major expansion, large infrastructure projects, research and development, or international growth.
Imagine you’re running a manufacturing business and demand is growing fast. You want to open a new production facility or expand overseas, but that requires serious investment. Private investors and bank loans may no longer be enough to support your plans. By becoming a PLC, you can raise capital from a much wider pool of investors, giving you the financial backing to scale fast.
Increased credibility and trust
PLC status often carries a certain level of prestige. Public companies are subject to strict regulation and reporting standards, which can increase confidence among lenders, partners, and customers.
For businesses operating at scale, this visibility and perceived stability can make it easier to secure finance, negotiate contracts, or enter new markets.
Easier transfer of shares and ownership
Shares in a PLC are designed to be bought and sold. This makes it easier for shareholders to enter or exit the business and provides flexibility around ownership over time.
For founders and early investors, this can offer clearer exit routes compared to private companies.
Disadvantages of a PLC
Stricter compliance and tighter deadlines
PLCs are subject to stricter reporting and regulatory requirements than other company structures. Annual accounts must be prepared and filed more quickly (with a six month deadline, compared to nine months for Private Limited Companies) and ongoing disclosures are more detailed and frequent.
In practice, this often means higher professional costs and more time spent on governance, compliance, and reporting. Many PLCs require dedicated legal, financial, and investor relations support to stay on top of these obligations.
Higher transparency and public scrutiny
By offering shares to the public, you also open the business up to public and shareholder scrutiny. Strategic decisions are no longer made solely behind closed doors. Performance, leadership choices, and long-term plans are closely watched by investors and the market.
This can limit flexibility and increase pressure on directors, particularly during periods of weaker performance or uncertainty.
Risk of hostile takeovers
Because shares in a PLC can be freely bought and sold, there is a risk that an external party could build a significant stake in the company without management approval.
This can expose the business to unwanted influence or takeover attempts, making strong governance, shareholder communication, and long-term planning essential.
In a nutshell: A Public Limited Company can help businesses raise large amounts of capital and build credibility, but it also brings stricter compliance, shorter filing deadlines, greater public scrutiny, and reduced founder control. It’s a powerful structure, but only for businesses ready to operate at scale.
Examples of Public Limited Companies
Public Limited Companies tend to operate at a scale far beyond most SMEs. In many cases, this enables them to become national or even international household names — like Tesco PLC, Barclays PLC, Rolls-Royce Holdings PLC, and Royal Mail PLC.
What these companies have in common is not just size, but complexity. They operate at national or global scale, require significant ongoing investment, and manage large numbers of shareholders. Public ownership allows them to raise substantial capital and fund long-term projects. And, at the same time, they must operate under the transparency and governance required of publicly traded businesses.
For most growing businesses, this level of scale is still a long way off. And that's exactly the point: PLCs are not designed for early growth. They’re built for organisations that are already operating at size and are ready to reach the next major milestone — along with the responsibility of being accountable to the public market.
Is a PLC the right step for your business?
For most businesses, becoming a Public Limited Company isn’t an early move. It’s usually a later milestone, reached once a company has already achieved significant scale and is looking for new ways to grow.
If you’re considering a PLC, the following questions can help with your decision:
Does your next phase of growth require more capital than private investors or loans can realistically provide?
Are you already operating at a scale where public scrutiny and governance feel necessary, not just tolerable? (For example, you may already have external board members or be running structured reporting and audit processes as part of your day-to-day operations).
Would opening the business up to public shareholders genuinely support your long-term strategy, or complicate it unnecessarily?
If the answer to those questions is “not yet,” that’s completely normal. Most UK businesses start out as Private Limited Companies (Ltd) and remain there for many years, or permanently. A Ltd structure offers flexibility, protection, and room to grow without the added complexity of public ownership.
If registering as a Private Limited Company feels like the most logical next step, Tide makes it easy to get started. Use our online company registration service to handle the entire process end-to-end. Simply fill in your company name and we’ll ensure your application is submitted correctly to Companies House.
You’ll receive your certificate of incorporation within one business day (or the following Monday, if you register on a Friday) and get a free Tide business bank account. From there, you can focus on growing your business at your pace, on your terms.
Wrapping up
A Public Limited Company can be a powerful vehicle for scale. It opens the door to significant capital and public investment — but it also comes with heavy compliance, public scrutiny, and a level of responsibility that only a small number of businesses are truly equipped for.
For most founders, the journey starts much earlier with a Private Limited Company. This popular structure gives you the flexibility to grow, adapt, and scale at the right pace. For a clearer picture on what that first step involves, check out our guide on how to set up a limited company.
And when you’re ready to make it official, allow Tide to handle the formal registration process. You’ll save time, money and bandwidth that’s better spent on your business.
