To be a public limited company, the company's constitution must state that the company is a public limited company. The company's name must include the words "public limited company" (or the abbreviation PLC) at the end of the company's name and the registration requirements for a public limited company must be met.
A public company must not do business or exercise any borrowing powers unless the Company Registrar has issued it with a certificate under section 761 of the Companies Act 2006 (a “trading certificate”). The procedure for applying for a trading certificate is set out in section 762 of the Companies Act 2006. For the application to be successful, the nominal value of a public limited company’s allotted share capital must be not less than £50,000, or the prescribed equivalent in euros.
A public limited company may, but need not apply to have its shares listed on the Stock Exchange or quoted on the unlisted securities market.
Any public limited company which has traded for at least 3 years can apply for its shares to be listed on the Stock Exchange. The company listed on the Stock Exchange must comply with the ongoing requirements of the Stock Exchange as to the publication of information about the company's affairs.
The unlisted securities market represents an alternative market for comparatively new or small public companies. The initial and ongoing requirements for a quotation on the unlisted security market are less stringent than that of a company listed on the Stock Exchange. Unless information is required then the company need only have been trading for 2 years.
Although both private companies and public limited companies are similar, there are some fundamental differences of detail.
- A private company director need not be specifically qualified or experienced.
- A private company can just have one director who may also be the only shareholder, a public limited company must have at least 2 directors and at least 2 shareholders.
- A private limited company's resources can be used to assist in the purchase of shares of the company when someone wishes to leave the company.
- A private company is prohibited from offering any securities of the company to the public, or allot or agree to allot any securities of the company with a view to their being offered to the public.
- There are fewer provisions regulating directors dealings with the company if the company is a private company.
- Private companies up to a certain size can be permitted to file abbreviated accounts with the register of companies.
- Since 1st October 2007 the default position for private companies is that they do not need to hold AGMs, although they may do so if they wish.
- Only a private limited company can dispense with the formalities of holding general meetings by having a signed written resolution.