A LLC, or limited liability company, is an unincorporated business. Owners are known as members and in most states can include individuals, corporations, other LLCs and foreign entities. A PLC, or public liability company, is a well known incorporated company that can sell ownership shares to the public. LLCs are commonly formed in the United States, while PLCs are commonly formed in the United Kingdom.
An LLC is formed with at least one owner and by filing articles of organization to govern the LLC. A PLC, on the other hand, can be formed by two or more directors and or shareholders agreeing to form a PLC, filing a memorandum of association or articles of association to govern the PLC, registering the company as a PLC, and selling ownership shares to the general public. Depending on the jurisdiction or country, registration of a PLC can be made at a Companies House, Registrar of Companies, or Companies Registration Office.
An LLC can be member-managed, whereby all members take part in the control and management of the LLC, or manager-managed, whereby control is only given to some members. In contrast, PLC management decisions are made by a PLC director or the PLC board of directors.
LLC members are accountable for the obligations of the LLC, but each LLC member is accountable for his own wrong doings and to the extent of the amount he invests in the company. PLC directors and or shareholders are not accountable for the PLC's debts, but they are accountable for any personal loans to the company.
LLC members are taxed once and file only one income tax return for a member's earnings. However, LLC members who choose to be treated as a C corporation will be taxed twice, once for the corporation's income and again for the LLC member's dividends. On the other hand, PLC directors and or shareholders are taxed twice. PLC owners file income tax returns and Class 1 National Insurance contributions on their director's earnings.
Generally, an LLC operating agreement will include a way to terminate an LLC, but if the agreement is silent, most states have default rules that will terminate the LLC such as a unanimous vote to terminate by its members. PLCs on the other hand, can be terminated by a merger or takeover.
LLC members can not issue stocks because LLCs are not incorporated. The ability to issue stocks is a right reserved for corporations and is governed by the Securities Exchange Act. A PLC, however, can issue stocks to anyone outside the company because PLCs are incorporated.