Question

Why would a Company become a Public Limited Company?

1 week ago

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2 Replies

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H

Hosea Dietrich

Give an explanation as to why a company would want to become a public company, trading shares on the stock exchange. What would be some advantages to this.

2 Replies

Faraz H Profile Picture
Faraz H Best Answer!

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There are many reasons why a company would become a public limited company (PLC). Some of them include but not limited to:

  • the ability to raise additional finance (usually through the stock market)
  • achieving economies of scale by lowering operating costs
  • greater publicity attracting customers
  • the ability to make the company look more prestigious
  • the opportunity to make acquisitions by offering shares to the shareholders of the target company
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Khyra Shah Best Answer!

A lot of companies would become Public to enable quicker expansion. One advantage of this would mean an increase in income and thus more profits.

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