Public Limited Company Law

Learn how public limited company law works in the UK, including legal requirements, directors’ duties and shareholder rights

At Towerstone Accountants we provide specialist limited company accountancy services for directors and owner managed businesses across the UK. We created this webpage for people running a company who want clear answers on tax, payroll, Companies House duties, and day to day compliance without jargon. Our aim is to help you understand your responsibilities, reduce the risk of penalties, and know when to get professional support.

Public limited companies, often referred to as PLCs, sit at the top end of the UK corporate landscape. They are subject to more scrutiny, tighter regulation, and higher expectations than private companies, but in return they gain access to public investment, enhanced credibility, and the ability to scale in ways most private businesses cannot.

In my experience, many directors and business owners understand the headline concept of a PLC but are unclear on the legal framework that governs it. Public limited company law is not simply an extension of private company rules, it is a distinct regime with its own requirements, risks, and responsibilities.

In this article I will explain what public limited company law covers in the UK, how PLCs are formed, the ongoing legal obligations they face, how directors’ duties operate, and how PLCs differ legally from private limited companies. I will also explore common misconceptions and practical issues I see when businesses consider moving to public company status.

What is a public limited company

A public limited company is a company that is legally permitted to offer its shares to the public. This is the defining feature that separates a PLC from a private limited company.

In UK law, a PLC:

  • Is incorporated under the Companies Act

  • Has share capital

  • Can offer shares to the public

  • Must meet specific capital and disclosure requirements

A PLC does not have to be listed on a stock exchange, although many are. It simply has the legal ability to raise capital from the public.

The legal foundation of public limited company law

The main source of public limited company law in the UK is the Companies Act 2006.

This legislation sets out:

  • How companies are formed

  • The duties of directors

  • Shareholder rights

  • Reporting and disclosure obligations

  • Rules specific to public companies

While most of the Companies Act applies to all companies, there are additional provisions and stricter rules that apply specifically to PLCs.

Public limited companies are also regulated through:

  • Companies House filing requirements

  • Financial reporting standards

  • Market and listing rules where applicable

  • Insolvency legislation

Together, these form the legal framework within which PLCs operate.

Minimum share capital requirements

One of the key legal differences between a PLC and a private company is minimum share capital.

A PLC must have:

  • A minimum allotted share capital of £50,000

  • At least 25 percent of this paid up before trading

This requirement exists to provide a degree of financial stability and protection for creditors.

Private limited companies do not have any minimum capital requirement, which is why PLC status is usually only appropriate for larger or well funded businesses.

Incorporating a public limited company

To incorporate a PLC, the company must be registered with Companies House.

The incorporation process involves:

  • Choosing a company name ending in plc or PLC

  • Submitting articles of association suitable for a public company

  • Appointing directors and a company secretary

  • Confirming share capital meets legal requirements

A PLC must have at least two directors and a qualified company secretary. This is another key legal distinction from private companies, which can operate with a single director and no secretary.

Articles of association and constitutional documents

The articles of association set out the internal rules of the company.

For PLCs, articles often include:

  • Rules on issuing and transferring shares

  • Procedures for general meetings

  • Voting rights

  • Director appointment and removal

Public company articles tend to be more detailed than those of private companies, reflecting the need to manage relationships between a larger and more diverse shareholder base.

Once adopted, the articles form a binding contract between the company and its members.

Offering shares to the public

A core feature of public limited company law is the ability to offer shares to the public.

This can involve:

  • Initial public offerings

  • Share issues to the public

  • Admission to trading on a recognised exchange

Offering shares to the public brings additional legal obligations, including compliance with financial promotion rules, prospectus requirements, and market disclosure obligations.

Even where a PLC is not listed, the act of offering shares publicly brings it within a more heavily regulated environment.

Ongoing reporting and disclosure obligations

PLCs are subject to enhanced transparency requirements.

These include:

  • Filing annual accounts and reports

  • Publishing half yearly or interim information where applicable

  • Making disclosures about significant events

  • Providing information to shareholders

Accounts must comply with recognised accounting standards and are subject to audit.

This level of disclosure exists to protect investors and maintain confidence in the public markets.

Directors’ duties in a public limited company

Directors of PLCs are subject to the same core statutory duties as directors of private companies, but the practical application of those duties is often more complex.

Key duties include:

  • Acting in the best interests of the company

  • Exercising reasonable care, skill, and diligence

  • Avoiding conflicts of interest

  • Promoting the success of the company

In a PLC, directors must balance:

  • The interests of shareholders

  • Long term business strategy

  • Market expectations

  • Regulatory compliance

Decisions are often scrutinised more closely, particularly where share prices or investor interests are affected.

Shareholders and general meetings

PLCs must hold general meetings to allow shareholders to exercise their rights.

Shareholder rights include:

  • Voting on key resolutions

  • Approving dividends

  • Appointing and removing directors

  • Approving major transactions

Notice periods, voting thresholds, and meeting procedures are strictly regulated. Failure to follow proper process can invalidate decisions and expose the company to legal challenge.

Dividend law for public limited companies

Dividends in a PLC are governed by company law and accounting rules.

Dividends can only be paid:

  • Out of distributable profits

  • In accordance with the company’s articles

  • With proper board approval

Because PLCs often have large and diverse shareholder bases, dividend decisions are closely watched and must be supported by robust financial analysis.

Unlawful dividends can lead to personal liability for directors.

Corporate governance requirements

PLCs are expected to meet higher standards of corporate governance.

This includes:

  • Clear board structures

  • Independent non executive directors in many cases

  • Audit and remuneration committees

  • Transparent decision making

For listed PLCs, governance codes set expectations around leadership, accountability, and stakeholder engagement.

While not all governance codes are legally binding, failure to follow them can have reputational and commercial consequences.

Differences between PLCs and private limited companies

Public limited company law differs from private company law in several important ways.

Key differences include:

  • Ability to offer shares to the public

  • Minimum share capital requirements

  • Mandatory company secretary

  • Stricter reporting and disclosure rules

  • Greater regulatory oversight

Private limited companies are generally simpler and more flexible, which is why most UK businesses operate in that form.

Insolvency and financial distress in PLCs

Insolvency law applies to PLCs in broadly the same way as to other companies, but the stakes are often higher.

Directors must be particularly careful when a PLC is facing financial difficulty.

Key legal considerations include:

  • Avoiding wrongful trading

  • Protecting creditor interests

  • Making timely decisions

  • Seeking professional advice early

Because PLCs often have public investors, insolvency can also raise market and reputational issues beyond the immediate legal process.

Market abuse and disclosure obligations

Where a PLC is listed or traded, additional legal obligations apply.

These can include:

  • Prompt disclosure of price sensitive information

  • Restrictions on insider dealing

  • Rules on market manipulation

Breaches can lead to serious penalties, including fines and director disqualification.

This area of law is complex and highly regulated.

Why businesses choose PLC status

Despite the additional legal burden, some businesses choose PLC status because it offers:

  • Access to large scale capital

  • Increased profile and credibility

  • Liquidity for shareholders

  • A platform for growth and expansion

Public limited company law exists to balance these benefits with protections for investors and the wider public.

Common misconceptions about public limited company law

There are several misunderstandings I see regularly.

A PLC must be listed

This is not true. A PLC can exist without being listed, although many are.

PLCs are only for very large companies

While PLCs are usually larger, the legal form itself does not impose a size limit beyond capital requirements.

Directors have less responsibility in a PLC

In practice, directors often face more scrutiny and risk, not less.

How I advise clients considering PLC status

When advising clients, I focus on whether PLC status genuinely aligns with their goals.

I ask questions such as:

  • Why public investment is needed

  • Whether governance structures are ready

  • How much regulatory burden the business can absorb

  • Whether alternative funding routes exist

PLCs can be powerful vehicles for growth, but they are not suitable for every business.

Final thoughts

Public limited company law in the UK is designed to support transparency, accountability, and investor protection. It allows businesses to raise capital from the public, but in return it imposes significant legal and regulatory responsibilities.

In my experience, PLCs work best when directors fully understand their legal obligations and invest in strong governance and compliance systems. The law is not there to discourage growth, but to ensure that growth is achieved responsibly.

If you are considering forming or converting to a public limited company, take advice early. The legal framework is robust and unforgiving of mistakes, but with the right preparation it can provide a powerful foundation for long term success.

You may also find our guidance on what is company law and what is a limited company helpful when exploring related limited company questions. For a broader overview of running and managing a company, you can visit our limited company hub.