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Public Limited Companies Quiz

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Questions and Answers

What is the main advantage of a PLC in terms of raising capital?

Easier to raise capital by issuing more shares (correct)
Minimal paperwork and administrative work
Banks are more willing to lend money without collateral
Limited liability for shareholders

Who are the primary shareholders in a PLC?

Government entities
Financial institutions (correct)
Individuals
Public businesses

What is the main disadvantage of a PLC in terms of administrative work?

Minimal paperwork and administrative work
No need to prepare annual accounts
Expensive and involves a lot of paperwork (correct)
No need to provide information to shareholders

What is the role of the chief executive in a PLC?

Responsible for carrying out the PLC policy and daily management (D) Signup and view all the answers

What does the term 'divorce of ownership and control' refer to in a PLC?

Separation between the owners and the managers controlling daily operations (B) Signup and view all the answers

What is the primary reason for a limited company to consider becoming a public limited company (PLC)?

To obtain further investment from a wider pool of potential shareholders (C) Signup and view all the answers

What is the minimum share capital required for a company to become a public limited company (PLC)?

£50,000 (C) Signup and view all the answers

What is the purpose of issuing a prospectus for a public limited company (PLC)?

Inviting potential investors to purchase shares before flotation (B) Signup and view all the answers

What are some of the expenses involved in a company's transition to a public limited company (PLC)?

Insurance against unsold shares and advertising costs (D) Signup and view all the answers

What is the key difference between a private limited company and a public limited company (PLC)?

A public limited company can offer shares to the general public, while a private limited company cannot (D) Signup and view all the answers