Using the word public does not mean disconnected with the state or government. The public joint stock companies is privaly owned.
The word public is used because any member of the public is free to buy shares in this business. The N° od shareholders ranges from 2 to infinity. Its name often ends with the letter(P.L.C) at the end meaning it has a limited liability e.g International trading company p.l.c in Douala.
ADVANTAGES
- It has a separate legal entity
- It enjoy limited liability
- It can attract people of better traders to the business
- It gives chances to people who have knowledge on business
- The transfer of shares is not register as in the case of private limited company.
DISADVANTAGES
- Slow decision making due to the need of consultation
- Length and expensive formation procedure
- There is management problem of a coordination communication and control.
- There is conflict of interest between the directors and shareholders. This is because there are out to make profit while directors defense their wages.