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Public and private limited companies Both types of company must audit their accounts, and have them available for inspection. They must indicate their status in their name, usually by using the abbreviation PLC or LTD. This warns their traders that their liability is limited and that debts cannot be recovered from the personal funds of the company shareholders. PRIVATE LIMITED COMPANIES Advantages Disadvantages Easy and inexpensive to set up. Lack of capital due to no share issue. Ownership and control are closely connected, e.g. Board of Directors are usually the main shareholders. No benefit from economies of scale e.g. bulks buying, cheaper borrowing. Small and less bureaucratic than PLCs, e.g. decisions can be taken more quickly. PUBLIC LIMITED COMPANIES Advantages Disadvantages Raise large amount of capital from share issue. Become too large resulting in poor labour relations. Benefit from economies of scale, e.g. bulk buying, cheaper borrowing. Conflict of interest between shareholders and the Board of Directors. Produce goods at lower unit cost. Possibility of takeover or merger...

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