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Limited Company or Public Limited Company
Which is right for your business?
HAVE YOU THOUGHT ABOUT BECOMING A PLC? Just as it is often thought (mistakenly so) that you are better off dealing with a limited company than a private individual it is often thought that you are better off dealing with a plc than an ordinary limited company.
The very name "plc" makes people think that the company is large and bound to have lots of assets. To trade as a plc when your competitors are merely "limited" sometimes gives real trading advantages.
How do you qualify to be a plc?
Surprisingly it is remarkably easy to qualify to be a plc.
In simple terms you need to have:-
| 1. |
Allotted shares of nominal value of at least £50,000 of which at least one quarter must be paid up. |
| 2. |
Change the name of the company to include "plc" |
| 3. |
Have a qualified Company Secretary (Solicitor, Accountant or qualified Company Secretary). |
| 4. |
Get an appropriate Auditor's Certificate. |
This is something of an over-simplification for there are a number of other items with which you need to comply but these are really, generally, not unduly onerous although the accounting regulations are certainly more complicated than for a limited company. In other words you must file more information on your annual return than an ordinary limited company.
The detail
If you think that you may be interested then the actual list of things which need to be done are as follows:
| (a) |
Alter the Memorandum and Articles to refer to the company as a public company. |
| (b) |
Get a print of those Memo and Arts so that they may be sent to the Companies Registry. |
| (c) |
Obtain a statement from your Auditors that the net assets were not less than the aggregate of its share capital and undistributable reserves |
| (d) |
Obtain a balance sheet dated not more than seven months before the application accompanied by an unqualified Auditor's report on that balance sheet |
| (e) |
Complete a Statutory Declaration of compliance by a director or secretary |
| (f) |
Ensure that the nominal value of the company's allotted shares is not less than £50,000 |
| (g) |
Ensure that at least one quarter of those allotted shares are paid up (£12,500) |
| (h) |
Have a minimum of two Members |
| (i) |
Have a minimum of two Directors |
| (j) |
Not to make a distribution if the amount of the net assets are less than the aggregate of the called-up share capital and undistributable reserves |
| (k) |
Not allot shares otherwise than the cash unless the consideration for those shares has been independently valued |
Then, once the forms are filled in, the Registrar will re-issue you with a Certificate on Incorporation showing that you are now a plc.
We can guide you through the decision making process ensuring the choice you make is the right one for your business.
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