Forming a Public Limited Company (PLC) represents a significant step in business. As specified by the Commercial Code, a PLC is a company whose capital is divided into shares (rather than parts), and it must have at least seven shareholders, who can be either individuals or legal entities. The minimum share capital required is €37,000.
How the Company Can Be Organized
A PLC can be organized in one of two ways:
Classic Model: This involves a Board of Directors with 3 to 18 members, who may include shareholders or their representatives. The Board appoints a Chairman from among its members, who may also serve as the Chief Executive Officer.
Supervisory Board Model: This structure includes a Supervisory Board consisting of 3 to 18 shareholders, which appoints a Management Board of 2 to 5 members.
This highly structured organization is suited for companies that are already substantial from the start. The costs of establishing and operating a PLC are high: setting up an SA requires legal assistance, management must be monitored by an accountant, annual accounts need to be approved by the general meeting of shareholders, and certain decisions require approval by extraordinary general meetings.
Trading Shares
Shares in a PLC can generally be transferred freely, but statutory provisions or shareholder agreements often include approval clauses. Finding buyers for shares is not always easy; shares cannot be resold quickly unless the company is listed on the stock exchange. For individual investors, this is where things start to get particularly interesting.