Forming a public limited company (PLC) can be a complicated process and there are a number of requirements that must be met upon incorporation and considerations for the future management of the company.
A key requirement upon the company’s formation is the minimum share capital needed for a PLC to be incorporated. In accordance with the Companies Act 2006, a PLC must have a minimum share capital of £50,000 of which one quarter of the nominal value and all of the share premium must be paid up. This effectively means that the minimum share capital that must be paid up for a PLC is £12,500 if the company meets the minimum share capital requirements only and has no share premium.
In addition to the share capital requirements, the Companies Act 2006 states that a PLC must have a minimum number of two directors, whereas a private limited company only needs to have one. Additionally, due to the more complicated legal and corporate governance issues that affect PLCs, it is necessary for a suitably qualified company secretary to be appointed upon registering the company. It will also be necessary to decide whether the company name will end in “public limited company” or “PLC”.
A further consideration when registering a PLC is that after the company has been formed it will then be necessary to apply for a trading certificate before the company can commence trading, unlike a private company which can commence trading immediately. Other differences from a private company include that a PLC must hold general meetings rather than using written resolutions to make changes to the company. Additionally, PLCs must hold Annual General Meetings (AGMs) and are also required to lay the accounts before the company’s members, which is usual business of an AGM. This being said, a benefit of forming a public limited company is that it can offer its shares to the public and can seek a listing on the Stock Exchange, as well as other investment exchanges. This is often a key reason for individuals to incorporate a PLC rather than a private company.
If you require more information or advice when incorporating a new public limited company please contact us at [email protected] or on 0208 952 0140.