Key Takeaways

  • The number of owners in a public company starts at two shareholders and can grow to virtually unlimited owners.
  • Ownership is distributed through shares, and both individuals and institutions can hold stock.
  • Shareholder rights vary, but typically include voting on major issues, receiving dividends, and transferring shares.
  • Public companies must follow strict regulatory rules to remain compliant with securities laws.
  • Ownership is dynamic—shares can be bought or sold freely on the market, changing the mix of owners regularly.
  • Unlike private companies with shareholder limits, public companies do not have a maximum cap on ownership.

The number of owners in a public company must be at least two but can grow to as many as the company desires.

What Is a Public Limited Company?

Public limited companies (PLCs) are a business entity type found in the United Kingdom. They have the word "public" in their name because a public company can offer stock to any interested investors via the London Stock Exchange or Alternative Investments Market.

Corporations in the United States have similar restrictions to public limited companies. Both are highly regulated because of their ability to sell shares so openly. Public companies issue securities through their IPO (initial public offering) and offer loans, bonds, on stock to the public market. To be officially considered a public company, a business must be traded on one of the British stock exchanges or via an over-the-counter market.

Other names for public limited companies include:

  • Public company
  • Publicly held company
  • Publicly traded company

The stock offerings, also called securities, put out by a public company can be through a broker or over the stock exchange. Frequently, private companies will work to become public companies when they want to be able to gain more capital for their business through public shares. Some famous public companies include:

  • Google Inc.
  • F5 Networks Inc.
  • Chevron Corporation
  • Procter & Gamble Co.

Who Owns a Public Company?

A public limited company must have a minimum of two shareholders with a minimum of £50,000 offered in the form of shares to the public market. Sometimes, business owners will choose to be classified as a public limited company, but keep their shareholders to a small group, because they don't necessarily want to offer shares to just anyone, but they want the respect that comes with the PLC distinction.

How Many Owners Can a Public Company Have?

The number of owners in a public company can range from the minimum legal requirement of two shareholders to millions of investors worldwide. Public companies differ from private companies in that there is no legal maximum on the number of owners. Ownership is open to the public, meaning anyone who buys stock becomes a shareholder.

For example:

  • Small public companies may have a few hundred shareholders.
  • Large multinational corporations like Apple or Microsoft often have millions of individual and institutional owners.

Ownership is highly dynamic. Because shares are traded daily, the roster of owners constantly changes. Institutional investors—such as pension funds, mutual funds, and hedge funds—often hold large percentages of stock, while retail investors collectively form another significant segment.

How to Form a Public Company

If an entrepreneur wants to start a public company, or a private company owner wants to branch out, they'll need to follow a few essential steps. First, they'll need at least two directors established for the business and a qualified secretary.

Other business entities, like corporations, can act as directors in a public limited company. However, an individual needs to fill at least one seat at the director table.

To form a corporation in the United States, business owners must file the appropriate paperwork with the state in which they plan to conduct business. Business owners in the United Kingdom must file with the British government agency Companies House. When they file, they'll need to pay the required fee and file their business's articles of association, a business formation application, and other necessary paperwork.

The articles of association required for businesses in the United Kingdom are similar to articles of incorporation filed by companies in the United States.

A name for the company will also be chosen, but certain words undergo more scrutiny than others when used in the name of a business. Such words are those that suggest a level of expertise, a certification, pre-eminence, or a license that the business doesn't actually have.

Public Company Finances

One of the many advantages of structuring your business as a public limited company is the opportunity to raise capital from outside investors. The limited part of the title eludes to the protection afforded to such investors so that they can contribute to different businesses and benefit from profit distributions without worrying about certain liabilities.

A public company has the chance to reach all kinds of potential investors across the market from big-time exchange players to simple individual shareholders.

Shareholder Rights and Responsibilities

Shareholders in a public company hold certain rights that protect their financial and governance interests. These commonly include:

  • Voting Rights: Most shareholders can vote on major company decisions, such as electing directors or approving mergers.
  • Dividend Rights: Investors may receive dividends if the company distributes profits.
  • Transfer Rights: Shares can generally be sold or transferred without restriction.
  • Inspection Rights: In some jurisdictions, shareholders may inspect certain company records.

However, ownership also comes with responsibilities. Shareholders assume investment risk—the value of their shares fluctuates with market conditions and company performance.

Public Company Paperwork

Like corporations, public companies do have the downside of additional paperwork when it comes to formation and reporting. Annual financial accounts and tax returns are just some of the requirements.

Ownership Disclosure Requirements

Because public companies can have a vast number of owners, regulators require transparency about significant shareholders.

Key requirements often include:

  • Beneficial Ownership Reporting: In the U.S., individuals or institutions that own more than 5% of a public company’s stock must disclose their holdings to the Securities and Exchange Commission (SEC).
  • Annual Reports and Filings: Public companies publish detailed shareholder information, financial data, and governance structures in their filings.
  • International Variations: Other countries, such as the U.K., have similar disclosure rules to protect investors and maintain market integrity.

Limited Liability of a Public Company

Public companies offer protection from liability to their owners and shareholders. This is one of their most well-known characteristics.

If the business defaults on a debt or runs in to legal trouble, the shareholders can only be held liable up to the amount of their initial contribution. The company itself is held liable for debts and taken to court because it is considered its own entity apart from its owners.

Frequently Asked Questions

  1. What is the minimum number of owners in a public company?
    At least two shareholders are required for a public company to exist.
  2. Is there a maximum number of owners in a public company?
    No. Public companies can have unlimited shareholders, ranging from a few hundred to millions.
  3. Who typically owns shares in public companies?
    Ownership is split between retail investors (individuals) and institutional investors (funds, banks, pensions).
  4. Do public company owners control the business directly?
    Shareholders elect a board of directors, which oversees management, but they do not typically manage day-to-day operations.
  5. Are public company shareholders personally liable for company debts?
    No. Shareholders’ liability is limited to the amount they invested in the company’s shares.

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