What is a public limited company (PLC), and who can buy its shares?

• A. A large company whose shares can be bought by the public on the stock market; liability limited to share capital.
• B. A nonprofit organization.
• C. A sole trader.
• D. A private club.

Answer: (A)

A public limited company is a company that can offer its shares to the general public and have those shares traded on a stock market, which helps it raise capital from many investors. The owners are shareholders, and their liability is limited to the amount they have invested in the shares, so personal assets aren’t at risk if the company runs into trouble.

Because the shares are available to the public and can be bought and sold on the stock market, anyone who meets market rules and regulations can buy into the company. This is what makes it different from other forms: a nonprofit doesn’t issue shares, a sole trader is owned by one person with unlimited liability, and a private club is a membership group rather than a company whose shares are publicly traded.