Establishing a Public Limited Company in England and Wales

A public limited company, commonly referred to as a PLC, is a company limited by shares that may offer its shares to the public, subject to the applicable securities and financial-services requirements. A PLC has separate legal personality, meaning that it can own assets, enter into contracts, incur liabilities and conduct legal proceedings in its own name.

This structure may be suitable for businesses seeking access to a wider range of investors, preparing for substantial external investment or intending to pursue admission of their shares to a public market. However, establishing a PLC does not automatically result in its shares being listed or traded on a stock exchange. A separate and significantly more extensive process applies where a company intends to obtain admission to trading.

Our London office assists domestic and international founders, companies and investors with establishing PLCs registered in England and Wales.

The legal and regulatory framework

PLCs are principally governed by the Companies Act 2006 and must be incorporated with Companies House. Their names must generally end with “public limited company” or “plc”, subject to limited statutory exceptions.

A PLC must satisfy more extensive requirements than a private company. These include:

• having at least two directors;
• appointing a company secretary who satisfies the statutory qualification requirements;
• maintaining the required minimum allotted share capital;
• completing the memorandum of association and preparing appropriate articles of association;
• identifying the initial shareholders and determining whether the company has any registrable persons with significant control or relevant legal entities;
• maintaining a registered office and registered email address; and
• complying with applicable identity-verification requirements.

The authorised minimum share capital is currently £50,000, or the prescribed euro equivalent. The relevant allotted shares must satisfy the applicable payment requirements, including the requirement that at least one-quarter of their nominal value and the whole of any share premium be paid up.

Before the PLC can commence business or exercise borrowing powers, it must obtain a trading certificate from Companies House. The relevant statutory requirements concerning the allotment and payment of its share capital must be satisfied before that certificate can be issued.

Where the company intends to raise capital from the public or seek admission to a regulated or other public market, additional rules may apply. These may include financial-services legislation, prospectus requirements, market rules, disclosure obligations and the requirements of the relevant trading venue.

The establishment process

Establishing a PLC will generally involve:

1. Assessing whether a PLC is the appropriate structure, taking account of the proposed business, investment strategy and funding requirements;
2. Selecting the company name and confirming its availability;
3. Identifying the initial shareholders, directors, company secretary and persons with significant control;
4. Designing the share-capital structure, including the classes, rights and nominal value of the shares;
5. Preparing the constitutional documents, including bespoke articles of association where appropriate;
6. Completing identity-verification and corporate transparency requirements;
7. Submitting the incorporation documents to Companies House;
8. Allotting and paying up the required share capital;
9. Applying for the trading certificate; and
10. Implementing the company’s governance and ongoing compliance arrangements.

The articles of association should reflect the company’s intended ownership and management structure. Shareholders’ agreements, investment agreements or subscription documents may also be required to regulate voting rights, transfers of shares, reserved matters and investor protections.

How we can assist

We can assess whether a PLC is the most appropriate vehicle and explain how it differs from a private company limited by shares. Our assistance may include planning the ownership and governance structure, preparing the incorporation documents, drafting bespoke articles of association and advising on directors’ duties, shareholder rights and corporate decision-making.

We can also coordinate the Companies House registration, assist with the trading-certificate application and prepare related corporate documentation. Where the proposed structure involves a public offering, admission to trading or other regulated activity, we can help identify the additional regulatory requirements and coordinate with financial, tax and other specialist advisers.

Our multilingual team provides assistance in English, Hungarian, German, Spanish, Russian and Turkish, enabling us to support overseas founders, investors and corporate groups establishing a PLC in England and Wales.

Early legal advice can help ensure that the company’s capital, governance and constitutional arrangements are suitable for its intended commercial and investment objectives