Understanding Public Limited Companies (PLCs)

Why might a business consider changing its structure to a PLC?

• To reduce the number of employees

• To decrease production costs

• To foster continued growth and expansion

• To avoid paying taxes

What does it mean when a company sells shares to the public?

• The company is going bankrupt

• The company is becoming a sole trader

• The company is merging with another company

• The company is becoming a public limited company

What is one advantage of a business becoming a PLC?

• Raising money through share capital

• Simplified accounting procedures

• Unlimited liability for shareholders

• Reduced transparency requirements

How does limited liability benefit shareholders in a PLC?

• Shareholders are responsible for all company debts

• Shareholders must pay company taxes

• Shareholders can lose personal assets if the company fails

• Shareholders are not personally responsible for company debts

Why might a PLC be viewed more favorably by banks and suppliers?

• Because PLCs have fewer regulations

• Because PLCs are seen as more credible

• Because PLCs have unlimited liability

• Because PLCs are smaller businesses

What is a disadvantage of becoming a PLC?

• Decreased public visibility

• Simplified financial reporting

• Increased scrutiny and regulation

• Reduced access to capital

What is a financial requirement for a company to become a PLC?

• A minimum of 500,000 pounds in share capital

• No financial requirements

• A minimum of 5,000 pounds in share capital

• A minimum of 50,000 pounds in share capital

How can the volatility of share prices affect a PLC?

• It has no impact on the company's value

• It can cause the company's value to fluctuate

• It guarantees a steady increase in share value

• It ensures the company's value remains constant

Which of the following is an example of a successful PLC?

• A freelance graphic designer

• A local bakery

• Apple

• A small family-owned restaurant

What is a common challenge faced by PLCs?

• Limited liability for shareholders

• Lack of access to public markets

• Increased privacy for financial records

• Complex accounting procedures