The key difference between UK public limited companies and UK private limited companies is that a UK public limited company may offer to sell its shares to the public.
A PLC cannot start business until it has a Certificate, issued by Companies House, entitling it to do so.
The main step to take in getting such a Certificate is to ensure that there is at least £50,000’s worth of shares in issue when the application is made, with at least 25% of each of the shares making that figure paid up in cash.
The following examples can be used to illustrate the potential pitfalls to beware of:
1. If the company has shares with a nominal value of £1.00 each, then at least 25 pence must be paid up in cash on each and every share, with the other 75 pence remaining unpaid and owing until such times as the shareholders pay it up voluntarily or upon receipt of a demand that they do so issued by the Directors. This will, therefore, equate to a cash amount of £12,500 paid up with £37,500 remaining owning to the Company.
2. If, though, those shares are of a nominal 1 pence each, then because it is not possible to divide such a sum into smaller denominations, the whole £50,000 must be paid up in cash, in full before the application for the trading certificate can be applied for.
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