The Main Features of a Public Limited Company as a Form of Ownership


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Shareholders own a PLC (Public Limited Company). By this I mean the
people with an investment in the PLC own it. For Example you can buy
shares in J Sainsbury’s plc, via the stock market. However the
shareholder that has a larger percentage of shares than all other
shareholders put together i.e. 51%, has 51% of the vote if there is a
vote, he/she has the most power.

The Capital needed to start a Public Limited Company could come from 2
different places. By this I mean that some of the money comes from a
loan from the bank, and the rest comes from shares sold to the public,
via the stock market. For Example 28% of J Sainsbury plc’s Share
Capital came from Lord Sainsbury. However £50,000 is needed to start a
PLC.

Limited Liability means that you are only liable for the business and
not any of your own belongings. By this I mean that if I were in debt
of £60,000 I would have to lose my business because my capital of
£50,000 is now all gone. For Example J Sainsbury plc have a Share
capital of £18,441,000,000. However if you see your share prices
falling you can always appoint a new director.

Dividend is paid out using the profits from a PLC. By this I mean that
the profit is divided into percentages and is paid out to
shareholders. So if there was £10,000 profit and I owned 20% shares
then I would receive £2,000. For Example if J Sainsbury plc were in
profit of £500,000 and I had 5% of shares then I would receive £25,000
dividend. However the lower the percentage of shares you have the
lower your dividend is going to be.

The Board of Directors makes decisions in the PLC. By this I mean
Shareholders elect a Board of Directors, their job is to run the

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"The Main Features of a Public Limited Company as a Form of Ownership." 123HelpMe.com. 17 Jan 2017
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business, to make profits go up and Share prices rocket. For Example J
Sainsbury plc has 11 directors, all with different tasks; they are J
Sainsbury plc’s Board of directors, and are the people that run the
business. However if there is a decision that is made and is disliked
by the Shareholders they at the next election the Board of Directors
could be voted out.


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