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Potential disadvantages of public company start-up status: public company status brings with it the financial advantage of being able to offer shares to the public, and a certain element of commercial respectability. However, these advantages mean (in theory at least) that any public company, even if unlisted can be owned by members of the public who have little day to day involvement in the company' business, and who therefore require greater statutory protection than the owners of a private company, who typically are more involved in the running their companies, often as directors.
For this reason, public companies are much more strictly regulated tan private companies. This will add to the cost of running the company, and may restrict what it wishes to do and how it seeks to operate.
Public company accounts must file with Companies House within six months after end of accounting reference period (CA 2006, s.442(2)b. Public companies must file accounts with companies House (CA 2006, ss.446 and 447, and 467). Accounts must be laid before a General Meeting no later than six months after end of accounting reference period (CA 2006, s.437).
Public companies must hold an Annual General Meeting (AGM) (CA 2006, s.336). The requisite percentage for holding a General Meeting on short notice is 95% (CA 2006, s.288).
Public companies requires to have minimum of two directors (CA 2006, s.154(2)). Restrictions apply on voting for the appointment of more than one director in just one resolution (CA 2006, s.160). A public can only make a quasi-loan and a credit transaction with one of its directors provided prior shareholder approval has been obtained (CA 2006, ss.198 and 201).
Financial assistance prohibited (CA 2006, s.678), subject to CA 2006, ss.681 and 682.
Public companies are requiring having a secretary (CA 2006, s.271) and sections 273 sets out qualifications required.
The public company must have allotted share capital at least up to the value of the authorised minimum (currently £50,000 – CA 2006, s.763 permits a euro equivalent to this amount set at 57,100 euros). The public company must maintain this as its minimum share capital (CA 2006, ss.650 and 662).
Each share allotted must be paid up to at least one-quarter of its nominal value together with the whole of any premium on it (CA 2006, s.586).
Section 561 pre-emption right on allotment can be disapplied under s.570 or 571 by special resolution or excluded and replaced by articles conferring a corresponding right under s.568.
The standard legal designation of a company which has offered shares to the general public and has limited liability. A public limited company's stock can be acquired by anyone and holders are only limited to potentially lose the amount paid for the shares. It is a legal form more commonly used in the U.K. Two or more people are required to form such a company, assuming it has a lawful purpose. Call us to discuss your needs and see how we can help.