Characteristics and objective of Public Limited Company:
Characteristics:
1. Ownership: A Public Limited Company (PLC) is owned by shareholders who can buy and sell shares freely on the stock exchange.
2. Number of Members: PLCs require a minimum of seven members and have no maximum limit.
3. Disclosure Requirements: PLCs are required to make their financial statements, annual reports, and other relevant information available to the public.
4. Limited Liability: The liability of shareholders in a PLC is limited to the amount they have invested in the company.
5. Separate Legal Entity: PLCs are recognized as separate legal entities from their shareholders, which means they can sue or be sued in their own name.
6. Regulation: PLCs are subject to stringent regulations and governance requirements imposed by the government and regulatory bodies like the Securities and Exchange Commission.
Objectives:
1. Profit Maximization: Like any other business entity, the primary objective of a PLC is to maximize profits for its shareholders.
2. Growth and Expansion: PLCs often aim to grow their business and expand their operations by taking advantage of the ability to raise capital through the stock market.
3. Shareholder Value: PLCs focus on enhancing the value of their shares to attract more investors and increase shareholder wealth.
4. Market Dominance: PLCs aim to establish themselves as market leaders in their respective industries and gain a competitive advantage over rivals.
5. Building Trust and Reputation: Public limited companies strive to build a strong brand identity and maintain a good reputation among stakeholders, including customers, employees, and investors.
6. Compliance with Regulations: PLCs must adhere to various legal and regulatory requirements to ensure transparency, accountability, and fair practices.