Public limited compan (PLC)
Public limited company (PLC) - the company's shares may be offered for sale to the general public and members' liability is limited to the amount unpaid on shares held by them. Public limited companies (plcs) must have at least two shareholders and must have issued shares to a value of at least £50.000, before it can trade. Our company will help you form public limited company registered in England or Scotland. The registration will take about 6-8 hours. PLC must have an authorized share capital of at least £50.000. Before it can start business, it must have allotted shares to the value of at least £50.000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium. A PLC must have at least two members and at least two company directors. The secretary (or each joint secretary) must also be a person who appears to the directors to have the necessary knowledge and ability to fulfill the functions and who: held the office of secretary or assistant or deputy secretary on 22 December 1980; or for at least three of the five years before their appointment, held the office of secretary of a non-private company; or is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or is a person who, by virtue of his or her previous experience or membership of another body, appears to the directors to be capable of discharging the functions of secretary; or is a member of any of the following bodies: the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland; the Institute of Chartered Accountants in Ireland; the Institute of Chartered Secretaries and Administrators; the Chartered Association of Certified Accountants; the Chartered Institute of Management Accountants (formally known as the Institute of Cost and Management Accountants); or the Chartered Institute of Public Finance and Accountancy. A PLC normally has only seven months after the end of its accounting reference period to deliver its accounts to the Registrar. A PLC has access to capital markets and can offer its shares for sale to the public through a recognized stock exchange. It can also issue advertisements offering any of its securities for sale to the public. In contrast, a private company may not offer to the public any shares in itself. Our company design four different package to form PLC.
What is a public limited company?
A public limited company is a company which is registered as such and complies with the following:
- It must state that it is a public limited company both in its memorandum and in its name. The memorandum must contain a clause stating that it is a public limited company and the name must end with 'Public Limited Company' or 'PLC'
- For public limited companies that are also community interest companies (CICs) the name must end with 'community interest public limited company' or 'community interest p.l.c.
- It must have an authorised share capital of at least £50,000.
- Before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium.
Can a PLC issue shares in another currency?
Yes, if it has passed the necessary resolutions to adopt that currency as part of its authorised capital and given the directors the authority to allot that capital. However, it must always have at least the authorised minimum of £50,000 sterling in issued capital, irrespective of what other currency it uses. A company may use as many currencies as it wishes for its share capital provided that they are true currencies.
When can a PLC start business?
A newly formed PLC must not begin business or exercise any borrowing powers until it has a certificate issued under section 117 of the Companies Act 1985 confirming that the company has issued share capital of at least the statutory. Please see our order link to get this certifficate. Once issued, the certificate is proof that the company is entitled to do business and borrow. We will normally post you the certificate, but we can fax a copy for collection at any Companies House office if you ask for this.
Are there any other restrictions on a PLC?
Yes. There are four main restrictions:
- A PLC must have at least two members and at least two company directors. The secretary (or each joint secretary) must also be a person who appears to the directors to have the necessary knowledge and ability to fulfil the functions and who:
(a) held the office of secretary or assistant or deputy secretary on 22 December 1980; or
(b) for at least three of the five years before their appointment, held the office of secretary of a non-private company; or
(c) is a barrister, advocate or solicitor called or admitted in any part of the United Kingdom; or
(d) is a person who, by virtue of his or her previous experience or membership of another body, appears to the directors to be capable of discharging the functions of secretary; or
(e) is a member of any of the following bodies:
-- the Institute of Chartered Accountants in England and Wales;
-- the Institute of Chartered Accountants of Scotland;
-- the Institute of Chartered Accountants in Ireland;
-- the Institute of Chartered Secretaries and Administrators;
-- the Chartered Association of Certified Accountants;
-- the Chartered Institute of Management Accountants (formerly known as the Institute of Cost and Management Accountants); or
-- the Chartered Institute of Public Finance and Accountancy.
- A PLC normally has only seven months after the end of its accounting reference period to deliver its accounts to the Registrar. A civil penalty will be incurred if it delivers accounts to Companies House after the statutory time allowed for filing. Penalties are fully explained in our booklet, 'Late Filing Penalties'.
- A PLC cannot take advantage of many of the provisions and exceptions applying to private companies under the Act, such as audit exemptions for small private companies.
- A PLC cannot apply for voluntary strike-off under section 652A, Companies Act 1985. Further information about this is available in our booklet 'Strike-Off, Dissolution and Restoration'.
What then is the advantage of a public company?
A PLC has access to capital markets and can offer its shares for sale to the public through a recognised stock exchange. It can also issue advertisements offering any of its securities for sale to the public. In contrast, a private company may not offer to the public any shares in itself.
What does limited liability mean?
Limited liability gives the owners of the company (its shareholders) protection if the company fails. This means that if a company is put into liquidation, the people who own the company will only be required to pay what they have already paid or agreed to pay towards settling its debts.
What is Companies House?
Companies House is responsible for company registration in Great Britain. It also has a key role in providing information about British companies. A new company must:
- give details of its constitution in the form of a Memorandum and Articles of Association
- give details of its directors, company secretary and members.
- have a registered office.
These documents are prepared by our company, but there is no requirement in law to use an agent. A new company comes into existence when the Registrar of Companies issues a certificate of incorporation. A same-day company incorporation service is also available for an additional fee. The following guidance is provided to help you understand how to register a company and the legal requirements that you must adhere to.
Do these rules apply to an oversea plc?
Most of the above rules do not apply to a public company formed abroad. On establishing a branch or place of business in Great Britain, such a company is governed by Part XXIII of the Companies Act 1985, just as any other oversea company is. However, besides Part XXIII of the Act, they are also governed by regulations in their country of incorporation, by certain parts of the Financial Services and Markets Act 2000, and by the City Code on Take-overs and Mergers.
What is a memorandum of association?
This document sets out:
- the company's name,
- where the registered office of the company is situated (in England, Wales or Scotland); and
- what it will do (its objects). The object of a company may simply be to carry on business as a general commercial company.
The company's memorandum delivered to the Registrar must be signed by each subscriber in front of a witness who must attest the signature.
What are articles of association?
This document sets out the rules for the running of the company's internal affairs.
What is a registered office?
It is the address of a company to which Companies House letters and reminders will be sent. The registered office can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a company changes its registered office address after incorporation, the new address must be notified to Companies House.
Company name checks
It is important to check that the name you want is acceptable to Companies House before you complete the company formation documents. Briefly, the restrictions are that:
- you cannot register the same name as another company;
- the use of certain words is restricted; and
- names likely to cause offence are not allowed.
It is also important to check whether your chosen name is similar to any other names already on the register. If your chosen name is too like another name, an objection could be made within the 12 months following the incorporation of your company and you could be directed by the Secretary of State to change the company's name.
In addition if there is a trade mark registration or application for or including a trade mark which is identical or similar to the company name you have chosen you may face legal action for a trade mark infringement. You can check the trade marks register at The Patent Office before registering a name at Companies House.
What is the minimum number of officers a company requires?
Every company must have formally appointed company officers at all times. A private company must have at least:
- one director - but the company's articles of association may require more than one
- one secretary - formal qualifications are not required. A company's sole director cannot also be the company secretary.
After incorporation, you must tell Companies House about:
- the appointment of a new officer
- an officer's resignation from the company
- changes in an officer's name or address or any of the other details originally registered
What responsibilities does a director have towards Companies House?
Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar as and when required by the Act. In particular:
- accounts (only for limited companies);
- annual returns
- notice of change of directors or secretaries or in their particulars
- notice of change of registered office (Form 287).
What are the duties of a company secretary?
They are not specified by the Act, but are usually contained in an employment contract.
As the secretary is an officer of the company under section 744 of the Act, they may be criminally liable for defaults committed by the company. For example failure to file - in the time allowed - any change in the details of the company's directors and secretary, and the company's annual return. The secretary may also have to make out a statement of the company's affairs if an administrative receiver or a provisional liquidator is appointed, or if a winding-up order is made. (Sections 47 (Section 66 for Scotland) and 131 of the Insolvency Act 1986.) Other duties. The company secretary usually undertakes the following duties:
(a) Maintaining the statutory registers. These are:
- the register of members (section 352);
- the register of directors and secretaries (section 288);
- the register of directors' interests (section 325);
- the register of charges (section 407 or 422 for Scottish companies); and
- for public companies only, the register of interests in shares (section 211).
(b) Ensuring that statutory forms are filed promptly. You cannot simply send a letter to notify the Registrar that you wish to change the situation of the company's registered office or that changes have occurred among directors or secretaries or their particulars. You should normally use forms 287 and 288a, b or c as appropriate. You may also use the annual return Form 363s in some circumstances if the return is due at the convenient time. Changes of directors' and secretaries' details must be notified within 14 days. There are many other forms that need to be delivered to the Registrar.
(c) Providing members and auditors with notice of meetings. You must give them 21 days written notice of an annual general meeting. You must give them 14 days written notice of a meeting which is neither an annual general meeting or a meeting to pass a special resolution. If you are the secretary of an unlimited company, the written notice required is 7 days.
(d) Sending the Registrar copies of resolutions and agreements. You must send the Registrar copies of every resolution or agreement to which section 380 applies, for example special and extraordinary resolutions, within 15 days of them being passed.
(e) Supplying a copy of the accounts to every member of the company, every debenture holder and every person who is entitled to receive notice of general meetings - also copies demanded by anyone under section 239 of the Act. You must send accounts at least 21 days before a meeting at which they are to be laid - see section 238 of the Act.
(f) Keeping, or arranging for the keeping, of minutes of directors' meetings and general meetings.
(g) Ensuring that people entitled to do so can inspect company records. For example, members of the company and members of the public are entitled to a copy of the company's register of members, and members of the company are entitled to inspect the minutes of its general meetings and to have copies of these minutes.
(h) Custody and use of the company seal. Companies no longer need to have a company seal, but if they do, the secretary is usually responsible for its custody and use. (Company seals can be bought from legal stationers and company formation agents.)
Does a company secretary have any powers
No, but the Act allows them to sign the following re-registration applications:
- the re-registration of a limited company as unlimited - section 49(4) of the Act;
- the re-registration of an unlimited company as limited - section 51(4);
- the re-registration of a public company as a private company - section 53(1)(b); and
- the re-registration of a private company as a public company - section 43(3).
The secretary is also allowed to sign most of the forms prescribed under the Act.
What rights does a company secretary have?
They depend on the terms of his or her contract with the company. The secretary has no special rights under the Act.
What information does Companies House require?
Company directors have a personal responsibility for making information about the capital structure, management and activities of their companies available both to the members of the company and to the general public. For companies with limited liability, this will include accounts.
All limited companies, whether trading or not, must keep accounting records and file accounts for each accounting period with the Registrar. Unless a company is claiming exemption as a medium-sized, small, audit-exempt or dormant company, the accounts will include:
- a directors' report signed by a director or the company secretary;
- a balance sheet signed by a director;
- a profit and loss account (or income and expenditure account if the company is not trading for profit);
- an auditors' report signed by the auditor;
- notes to the accounts; and
- group accounts (if appropriate).
What period should the accounts cover?
A company's first accounts must start on the day of incorporation. The first financial year must end on the 'accounting reference date' or a date up to seven days either side of this date. Subsequent accounts start on the day following the year-end date of the previous accounts. They end on the next 'accounting reference date' or a date up to seven days either side.
How is the accounting reference date set?
The accounting reference date is the date in each year to which accounts will be drawn up. The date depends on the date of incorporation as it is the last day of the month in which the anniversary of incorporation falls. For example, if your company is incorporated on 2 July this year, the accounting reference date will be 31 July, and its first financial year must end on 31 July next year (or within seven days of that date).
Can the accounting reference date be changed?
Yes. You may change it by. You must do this during the accounting period affected by the change or during the period allowed for delivering the associated accounts to us.
How long do I have to deliver accounts?
The first accounts of a private company must be delivered: within 10 months of the end of the accounting reference period; or if the accounting reference period is more than 12 months, within 22 months of the date of incorporation, or three months from the end of the accounting reference period, whichever is longer.
What else must I tell Companies House?
Here are some of the important things that you must tell us about - using, in most cases, a special form we provide, and within the time limits stated.
- Changes of director(s) and secretary, within 14 days.
- Details of new shares being allotted, within one month.
- Any special or extraordinary resolutions and certain types of ordinary resolution, within 15 days of them being passed by the company.
- When a resolution alters the memorandum or articles of association of a company, a copy of the amended document must also be sent in at the same time as the resolution.
- Details of any mortgage or charge created by the company
- A change of registered office, within 14 days.
What about annual returns?
Every company must deliver an annual return to Companies House at least once every 12 months. It has 28 days from the date to which the return is made up to do this.
An annual return is a snapshot of general information about a company giving details of its directors and secretary, registered office address, shareholders and share capital. Companies House will send a pre-printed 'shuttle' annual return form to the company's registered office each year. It details the information already held on our database. The details should be:
- checked closely (and amended if necessary);
- signed and dated; and
- returned to us within 28 days of the date shown on the form, with the filing fee.
If you file the annual return late or not at all, the company and its director(s) and secretary can be prosecuted. Please note that annual returns are quite separate from annual accounts
What happens if I don't send the information to Companies House on time?
It is easy to lose confidence in a company that doesn't meet its legal obligations. If you don't tell us about your company's financial state on time, and you don't send in details of changes, anyone wanting to do business with you will not have access to the most up-to-date information about your company. It could cause trading problems or affect your company's credit rating. It could even stop a potential investor from putting money into your company, or prevent you from getting a loan when you need it. If your accounts are delivered late, there is an automatic penalty. This is between £100 and £1,000.