Are you thinking about setting up a public limited company in Ireland?
This article is written for business owners and entrepreneurs considering their company structure options in Ireland. If you're thinking about raising capital through public investment or planning to list your company on a stock exchange, this guide is essential reading.
What is a PLC? Understanding Public Limited Companies in Ireland A public limited company in Ireland is a company limited by shares that has share capital . The big difference between PLCs and private companies is that PLCs can sell shares to the public. This makes them a good business structure for companies that want to raise money from many investors.
Private companies limit who can own shares, but a PLC can offer its shares to the public. This can happen through a public offering or by listing on the stock exchange.
Key Features of a Public Limited Company Legal Entity Status : A PLC exists separately from its shareholdersLimited Liability : Shareholders only risk losing what they've invested in sharesTransferability of Shares : Shares can be easily bought and sold on public marketsPerpetual Succession : The company continues even when ownership changesPublic Investment Access : Can raise money through public offeringsCorporate Governance : Must follow stricter rules about openness and accountabilityShare Capital Requirements for Public Limited Companies Every PLC must have at least €25,000 in share capital. This sets PLCs apart from smaller private companies that can operate with less money. If a PLC's share capital drops below this minimum, the company must either increase it or change to a different type of company .
Share Capital Structures in PLCs vs Private Companies This table shows the main differences in share capital between PLCs and private companies in Ireland:
Aspect
Public Limited Company (PLC)
Private Company Limited by Shares
Minimum Share Capital
€25,000
No minimum required
Offer to Public
Can sell shares to public
Cannot sell shares to public
Number of Shareholders
No upper limit
Usually fewer shareholders
Transferability
Easily transferable
Often limited by company rules
Bearer Instruments
Generally can't issue bearer instruments
Cannot issue bearer instruments
Company Director Requirements for PLCs in Ireland A PLC must have at least two directors . This is different from private companies, which can have just one director. PLCs also have specific rules about rotating directors at annual general meetings, unless the company's constitution says otherwise.
How much directors get paid in a PLC is decided by the company in a general meeting, based on its constitution and specific rules for "traded PLCs."
Director Duties in Public Limited Companies Directors of PLCs have bigger responsibilities than those in private companies, including:
Following more complex rules and regulations Managing relationships with many different shareholders Making sure financial reporting is clear and honest Maintaining good corporate governance standards Calling emergency meetings if the company loses significant capital How to Go Public: Company Formation Process for PLCs Becoming a public limited company involves more steps than setting up a private company limited by shares. You can either start as a PLC or convert from a private company.
Requirements to Become a Public Limited Company When starting a new company as a PLC, or when a private company wants to become a PLC, you must:
Prepare a Constitution : Create company rules that meet PLC requirementsGet Enough Share Capital : Secure the minimum €25,000Appoint Directors : Find at least two qualified directorsHire a Secretary : Get a qualified company secretary Register the Company : Submit all required paperwork to the RegistrarGet Trading Certificate : Obtain this before starting business as a PLCPrivate and Public Companies: Comparing Business Structures in Ireland When choosing a business structure, you need to think about the differences between private and public companies. Each type has its own advantages and limits.
Company Limited by Shares vs Public Limited Company Both a private company limited by shares and a public limited company protect owners through limited liability, but they differ greatly in how they operate, what rules they must follow, and how they can raise money.
Public Limited Company Advantages and Disadvantages Advantages of PLCs in Ireland Access to Capital : A PLC can sell shares to the public, potentially raising lots of money through an initial public offering or additional share sales.Better Reputation : Being a publicly listed company often brings more credibility and visibility in the market.Easy Selling of Shares : PLC shares can be traded on public markets, making it easier for shareholders to sell when they want.Separation of Ownership and Control : Owners (shareholders) are separate from those who run the company (directors).Business Expansion Opportunities : The ability to raise large amounts of money helps growth plans and market expansion.Using Shares for Buying : Publicly traded shares can be used to buy other companies.Disadvantages of Limited Company Structures: PLC Challenges Stricter Rules : PLCs must follow more rigorous financial reporting and corporate governance rules than private companies.Higher Costs : Registration fees, compliance costs, and running expenses are typically higher for a PLC than for a private company.Less Control : Founders may lose some control over the company as ownership spreads among many public shareholders.More Disclosure : PLCs must share much more information about company accounts and operations.Market Pressure : Public companies often feel pressure to show good short-term results to keep shareholders happy.Takeover Risk : PLCs may be targeted for hostile takeovers if share prices drop.Operating Restrictions for PLCs Starting Business A newly registered PLC (either brand new or created through a merger) cannot do business or borrow money until the Company Registrar gives a certificate confirming that the value of its share capital is at least the required minimum, and a specific declaration has been submitted.
Annual General Meetings and Shareholder Rights Unlike some private companies, a PLC with two or more members must hold an annual general meeting (AGM). These meetings give shareholders a chance to:
Check how the company is doing Vote on important company matters Choose or remove directors Approve dividend payments Ask management questions about company plans Distribution of Assets and Dividend Rules A PLC can only give out money to shareholders if its net assets are not less than the total of its called-up share capital and undistributable reserves, and the distribution doesn't reduce the net assets below that total.
Buying Own Shares PLCs face extra rules about buying their own shares compared to private companies. For example, a PLC cannot buy its own shares if doing so would reduce the value of its non-redeemable issued share capital below one-tenth of its total issued share capital.
Serious Loss of Capital If a PLC's net assets fall to half or less of its called-up share capital, the directors must call an extraordinary general meeting (EGM) to discuss ways to fix the situation.
Disclosure Requirements for Every Company: Special Rules for PLCs Disclosure of Interests in Shares PLCs have specific rules about reporting when individuals or groups buy significant amounts of voting shares, including thresholds for notification and keeping a register of these interests.
Financial Reporting Requirements The financial statements of a PLC must be checked by statutory auditors, ensuring the transparency expected of companies that may seek public investment. Financial reporting for PLCs is more detailed than for private companies and typically includes:
Full profit and loss accounts Detailed balance sheets Cash flow statements Directors' reports Corporate governance statements Reports on how directors are paid Naming Conventions for PLCs in Ireland The words "public limited company" can be shortened to "p.l.c." or "plc" in the company name. The Irish language version "cuideachta phoiblí theoranta" can be shortened to "c.p.t." or "cpt".
A PLC cannot use a name that might make people think it's another type of company when the fact that it's a PLC would be important.
Company Limited by Guarantee vs PLC: Alternative Business Structures While this article focuses on PLCs, it's worth mentioning the difference between a company limited by shares and a company limited by guarantee. Companies limited by guarantee are usually used for non-profits, charities, and social enterprises. They don't have shareholders but instead have members who promise to pay a small amount if the company closes down.
Converting Between Business Structures: Becoming a Public Company Process to Re-register as a PLC A private company can change to a PLC through re-registration. This requires:
A special resolution approved by shareholders Meeting the minimum share capital requirements Changing the company constitution Filing the right paperwork with the Companies Registration Office Getting a trading certificate before starting business as a PLC If needed, a PLC can also change back to a private company limited by shares, if it meets the relevant requirements.
Understanding PLCs and IPOs It's important to know that becoming a PLC and doing an Initial Public Offering (IPO) are connected but not the same thing. Converting to a PLC is a legal change to your company structure that allows you to offer shares to the public. An IPO is the actual first sale of a company's shares to the public on a stock exchange. To do an IPO, your company must first be a PLC, but not all PLCs choose to have an IPO right away.
Some companies become PLCs to meet the legal requirements first, then plan their IPO for a later date when market conditions are favorable. The IPO process involves working with investment banks, setting a share price, marketing to investors, and actually listing on a stock exchange like Euronext Dublin (formerly the Irish Stock Exchange) or the London Stock Exchange.
Conclusion: Is a PLC the Right Choice for Your Business? Generally speaking, setting up a public limited company in Ireland only happns in very rare cases. For the vast majority of entrepreneurs, a private limited company is the structure of choice. It would be fair to say that around 95%+ of companies are private limited companies.
While PLCs can offer big advantages for business expansion and raising capital, they come with extra rules and responsibilities.
Although a PLC isn't right for most companies, it provides a solid framework for businesses that want to access wider markets and more investment.
If a PLC is not quite right for your business and you would prefer a private limited company, let us help you set that up .
Frequently Asked Questions What is a Public Limited Company (PLC) in Ireland? A Public Limited Company (PLC) is a type of business structure in Ireland that can offer its shares to the public and become a publicly traded company . Unlike private limited companies , a PLC can sell shares on a stock exchange such as the London Stock Exchange . In Ireland, a PLC is identified by having "public limited company" or "PLC" at the end of its company name . PLCs are typically larger organisations with more regulatory requirements than private companies . A public limited company in Ireland is regulated by the Companies Act 2014 and must have a minimum share capital of €25,000, of which at least 25% must be paid up.
How does a PLC differ from a private limited company in Ireland? The main difference between a PLC and a private company is that a PLC can offer shares to the public and be listed on the stock exchange, while a private company may not. PLCs require a higher minimum share capital (€25,000) compared to private limited companies (€1). PLCs must have at least two directors and a qualified company secretary , whereas in a private company, the secretary can be one of the directors. PLCs face stricter reporting requirements and more transparency obligations. Additionally, there's no upper limit on the number of shareholders for a PLC , while private companies in Ireland are limited to 149 shareholders. Both types offer limited liability to their shareholders, meaning personal assets are protected from company debts.
What is an example of a public company limited? Examples of well-known public limited companies in Ireland include Ryanair Holdings PLC, Bank of Ireland Group PLC, and Kerry Group PLC. These companies are listed on stock exchanges like Euronext Dublin or the London Stock Exchange, which means their shares can be bought and sold by the public. As PLCs, they must follow specific rules about financial reporting, shareholder meetings, and corporate governance. Their PLC status allows them to access capital markets for funding their business expansion and growth plans.
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