If I were to set up my own company, what would be the benefits of being a plc?

Bullet points and simple terms for a business novice please!</p>

Thanks</p>

Foz
</p>

 

erm

I take it your floating an idea on the stock market then?

 

Is that what it means? Can a small business not be a plc? I thought that if you had your own business and made it a plc then you could pay yourself a wage?

 

A public limited company (PLC) had a Memorandum which states that it is a public company. It has an authorised share capital of ?50,000 minimum and is registered at Companies House as a PLC.



The company must have a minimum of 2 directors and one company secretary and have at least 2 shares issued.



Before you can start trading as a PLC you will need to complete a form 117 from Companies House and make a statutory declaration that the company complies with the minimum share capital for a PLC. It must also have issued 25% of share capital which must be fully paid. Where the share capital is ?50,000 this would be ?12,500.

For more information, please visit the Companies House website

 

Another "erm"......

I think you may be confusing a plc with a limited company.

You can pay yourself a wage whatever type of company you set up otherwise there would be little point in doing it.

Basic principles (any accountants on here please get ready....): -

Sole trader - Unlimited liability. You work for yourself and draw from the business whatever funds you want for your own needs. Your own personal assets and the business assets are one and the same legally, so if the business goes bust creditors could go after your house and personal property.

Partnership - like a sole trader but with several people involved. Watch out for "joint and several liability" which basically means that a creditor can go after any individual from the partnership for the entire debt - there is no concept of shared debt. Again, your personal assets are at risk.

Limited company (private) - company with financial liability limited by issue of shares. Assets are owned by the company which is legally distinct from the shareholders as persons. You are employed by the company and are paid a salary (which you can set the level). In a disaster only the assets of the company are at risk (but watch out for fraudulent trading laws etc) and your personal assets are safe. Shares can only be bought and sold with the agreement of directors/shareholders (depending on the company rules and policy, usually called memoradum and articles of association).

Public limited company - company limited by shares which can be freely bought and sold on the stock market. Stringent rules on reporting and accounting to safeguard (in theory) shareholders. Usually very large companies because the overheads involved would normally be too much for start up unless substantial funds were available.

Right that's my bit ready to be shot down now. There are other less common forms (e.g. limited partnerships, unlimited companies etc) but quite rare. Google the above descriptions and you will soon find out what they mean in more detail.

If you are thinking of starting a business, ring an accountant and find one who will give you initial advice for free to get you going. If he/she wants paying, ring a different one.

 

do you mean ltd company rather than plc.

I've just switched from sole trader to ltd company.

If you're just starting up you won't go far wrong getting in touch with your local business link and getting some advice - free.

 

Yes very true

Business Link will advise, also most banks will give free start up advice but obviously they are trying to sell themselves - still can be a useful information source though

 

Thanks very much nt

 

RE: Thanks very much nt

What most small companies tend to do where the owner is the main person doing the work, is to pay that person just the minimum wage - he can then take any profit the company makes as a dividend - which attracts a much lower tax rate (10% I think). You need to get an accountant to recommend the most appropriate business structure for your circumstances.

As you'll have seen from other posts - theres not much difference between a plc and a limited company. The big change comes when a plc becomes a listed company (usually first on the AIM) - which involves a massive amount of additional regulation as a result of the shares being available to trade on the stock market.

 

there aren't any real benefits

apart from making your company look more posh

Ltd company = requires £1 share capital
plc = requires £50,000 share capital

 

RE: Thanks very much nt

How does corporation tax fit in.

Doesn't the tax man take his cut before the dividend gets paid.

Also is it right that you can give the Missus 50% of the shares and pay her a dividend - and if she doesn't work the first 5grand or so is tax free.

 

You get to pay much less tax, but have to pay for an accountant.

 

You get to pay much less tax, but have to pay for an accountant.