A public limited company is a commercial company owned by individuals who participate in the capital stock through securities or shares.
A public limited company is a commercial company owned by those people who participate in the capital stock through shares or securities . The owners of the corporation, therefore, are those who have shares in it.
It should be clarified that the share capital is the initial amount that the partners contribute to the company without there being a right of return. From this capital , the public limited company can begin to develop its activity.
It is important to mention that society , a term that has its etymological origin in the Latin word sociĕtas , can refer to different issues. On this occasion, we are interested in its meaning as the group of individuals who form a unit through cooperation to achieve a common objective .
When several people establish an agreement to make certain contributions with the intention of achieving something together, they establish a partnership contract . A commercial or commercial company , in this sense, is one whose purpose is the development of commercial acts.
Administration of a public limited company
A public limited company is managed according to its statutes. Shareholders generally elect a board of directors or a board of directors , which is voted on every certain amount of time .
In addition to this set of data released about the public limited company, it is interesting to know others about it, such as the following:
- The minimum number of partners is one.
- The agreements adopted within any public limited company must be supported in a vote by the majority of the partners. However, through its own statutes it can be determined that in certain types of issues or topics it is necessary, for example, to achieve an absolute majority.
- In the aforementioned statutes it is essential that the administrative bodies that the entity will have are included and among them an administrator and a board of directors cannot be missing.
Shareholders are the owners of a corporation.
Its advantages and disadvantages
When it comes to giving legal form to a company, many people make the decision to make it a public limited company and they do so based on the advantages it has:
- The liability of the partners is limited, so their personal assets are protected.
- It is open, insofar as partners can sell their shares freely.
- The public limited company can go public.
- It has another great advantage and that is that it can be started by a single person.
However, there are also those who prefer another option because they consider that it has certain drawbacks such as a much stricter operation, that it requires a complex incorporation process or that it is ideal for what are large businesses.
It is important to highlight that the corporation is just one of the forms of organization that people have when establishing a company . The creation of a limited liability company or a cooperative are other alternatives, each with its particularities, benefits and disadvantages.