8 Analyse the disadvantages of public limited company. [6]

[Sir Afzal Shad]

Q8 Analyse the disadvantages of public limited company. [6]

Possible Structure:
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[Syed Mustafa Ali]

[KN] Regulatory compliance
[AN] Public limited companies are subject to extensive regulatory requirements and reporting obligations.
[AN+] This includes filing detailed financial statements, disclosing significant corporate information, and adhering to securities regulations.

[KN] Loss of control
[AN] When a company goes public and issues shares to a wide range of shareholders, it often results in the dilution of ownership and control.
[AN+] Shareholders, including institutional investors and individual stockholders, have the right to vote on key corporate decisions and elect the board of directors.

[Shaliza khawaja]

(kn) lose of control
(an) as too many shares could have been sold off
(an) which can lead to less flexibility
(kn)higher set up costs
(an) which could mean less finances left to purchase resources
(an+) making a company take loans

[Salman Khalid]

[KN]Loss of Control
[AN]When a company goes public, the original owners may lose a significant degree of control over decision-making.
[AN+]This can be particularly pronounced if a large portion of the company's shares are sold to the public

[KN]Pressure to Satisfy Shareholders
[AN]The primary responsibility of the management in a PLC is to maximize shareholder value.
[AN+]This can lead to a focus on short-term profit maximization and dividend payouts, which may not always align with the best long-term interests of the company or its employees.

[Kumail Alvi]

[KN] Easy loss of control.
[AN] As PLCs sell their shares to the public control gets distributed.
[AN+]
This may lead to a reduction in the influence of the founders or original owners, as decisions may be required to conform to the preferences of a varied group of shareholders, which could potentially trigger conflicts.

[KN] Market Pressure.
[AN] Publicly listed companies face external pressures that can impact their stock prices, including market sentiment, economic conditions, and various other factors.
[AN+] This may result in an emphasis on achieving short-term quarterly results that might not be in harmony with the company's long-term strategic objectives.

[ayyan ali]

[KN]have to reveal alot of financial information to the public.
[AN]WHICH MEAN THEIR money matter are out in public and if business has a large competition this could be bad for the business
[AN]also find difficlty to raise capital bcz this lead to increase in capital.

[KN]unstable stock prices
[AN]when ur company share are traded on a stock prices can go up and down alot.
[AN+]this could give an image of unstable business and thus lead to bad word of mouth and reduce brand image

[Syed Raza]

[KN] Increased Competition
[AN] Being publicly listed company increases competition, as competitors respond to the company's strategies more readily.
[AN+] thus business need to adopt stronger strategies for better output

[KN] Loss of Control
[AN] As the ownership of the company becomes dispersed among a larger number of shareholders, the founders and early investors may lose control over the company's decision making processes.
[AN+] This may lead to a reduction in the influence of the founders or original owners

[Talha Asim]

(Kn) loss of control (an) if too many shares are sold the original owner can lose their lead ownership role (an+) in order to gain back such status they would have to buy more shares in the company increasing their personal costs

(Kn) stress of satisfying shareholders (an) since shareholders are how the company gets investments they must keep them willing to keep investing (an+) if they fail to do so then the shareholders may take out their shares and shift to other companies

[Ibrahim Aamir]

[KN] Short-term focus
[AN] Public companies often face pressure from shareholders and analysts to deliver short-term results.
[AN+] This can hinder long-term strategic planning and investment in research and development.

[KN]loss of control
[AN] by selling so many shares and if one person manages to gain shares more then the owner him self then the control over the business can be lost and shifted to most shared owned by the business
[AN+] this would result in higher risk

[Humzah Zafar]

[KN]Loss of control
[AN]Due to shares being sold to the public,the owner loses control over the business as there are alot of shareholders
[AN+]This may lead to them buying more shares in the company to gain back their status and influence.this will increase their personal costs

[KN]Competitive disadvantage
[AN]Due to everything being soo public.competitiors may respond to changes in business decisions more readily
[AN+]Thus this gives them a competitive edge over the public limited company

[Farzan Siddiqui]

[KN] Loss of control.
[AN] When a company shares sold public the owner looses the control of the business.
[AN+] This results in increasing the cost of the owner.

[KN] More competitive pressure.
[AN] There is more competition due to competitor's responding more quickly to the company's strategies.
[AN+] To avoid this business need to have stronger strategies.

[Hadia Zia]

[KN] High cost of managing.
[AN] Setting up and managing PLC can be expensive with costs related to meeting regular requirements, financial reporting etc.
[AN+] Thus this can risk the growth of business in a profitable manner.

[KN] Loss of privacy..
[AN] Public companies must disclose their sensitive information related to business info etc leading to higher risk of it being out.
[AN+] Thus this can hinder sustainability with risky future.

[Salman Khalid]

[KN] Easy loss of control.
[AN] As PLCs sell their shares to the public control gets distributed.
[AN+]
This may lead to a reduction in the influence of the founders or original owners, as decisions may be required to conform to the preferences of a varied group of shareholders, which could potentially trigger conflicts.

[KN] Market Pressure.
[AN] Publicly listed companies face external pressures that can impact their stock prices, including market sentiment, economic conditions, and various other factors.
[AN+] This may result in an emphasis on achieving short-term quarterly results that might not be in harmony with the company's long-term strategic objectives.

underlined analysis point is just an explanation to the knowledge point

[Salman Khalid]

[KN]Loss of control
[AN]Due to shares being sold to the public,the owner loses control over the business as there are alot of shareholders
[AN+]This may lead to them buying more shares in the company to gain back their status and influence.this will increase their personal costs

[KN]Competitive disadvantage
[AN]Due to everything being soo public.competitiors may respond to changes in business decisions more readily
[AN+]Thus this gives them a competitive edge over the public limited company

lack of direction in the highlighted analysis point

[Hussain Asghar]

[KN]loss of control
[AN] by selling so many shares and if one person manages to gain shares more then the owner him self then the control over the business can be lost and shifted to most shared owned by the business
[AN+] this would result in higher risk

KN] Market Pressure.
[AN] Publicly listed companies face external pressures that can impact their stock prices, including market sentiment, economic conditions, and various other factors.
[AN+] This may result in an emphasis on achieving short-term quarterly results that might not be in harmony with the company's long-term strategic objectives.