1 For instance, the Sarbanes-Oxley Act of 2002 (SOX) imposes many compliance and administrative rules on public companies SOX requires all levels of publicly traded companies to implement and execute internal controls. The most contentious part of SOX is Section 404, which requires the implementation, documentation and testing of internal controls over financial reporting at all levels of the organization. Public companies must also conduct operational, accounting and financial engineering in order to meet Wall Street’s quarterly earnings expectations. This short-term focus on the quarterly earnings report, which is dictated by external analysts, can reduce prioritization of longer-term functions and goals such as research and development, capital expenditures and the funding of pensions, to name but a few examples. In an attempt to manipulate the financial statements, a few public companies have shortchanged their employees’ pension funding while projecting overly optimistic anticipated returns on the pension’s investments
DISADVANTAGES OF PUBLIC LIMITED COMPANY :
- Existing members of the company may not have full control over the company.
- If the company wants to offer shares to the public at large it has to comply the various legal compliances that will take time and almost continuous cost. And F.S.A. requirement and followings also for getting its securities listed on the stock exchange
At least £700,000 market value in shares
5 years published or filed accounts or shorter by discretion
25% minimum of the shares must be in public hands
Disclosure of details etc.
- It has to provide the following detail to the stock exchange to the stock exchange –
Details of the company
Details of the shares to be issued
Financial details regarding the company
Details of the management – who they are.
Recent developments and prospects of the company and any group etc. and because of this is against the very intention of the existing members as they want to minimize the public scrutiny but here if public become the member of the Company then they have the right to get those detail of the company which they are entitled for example :
To check the various type of registers such as charge, members, investments, minutes of the board meeting and minute of the general meeting those which they are allowed as per the law and the article of the company however article of a public company cannot reduce the transparency rather they can enhance the Same, and enhancing is not in the favor of existing member as they have expressed about the same.
例如，2002年“萨班斯 – 奥克斯利法案（SOX）对许多合规，行政法规对上市公司，SOX要求各级实施和执行内部控制的上市公司。最有争议的部分SOX第404条，它要求对财务报告的内部控制各级的组织实施，文档和测试。同时，上市公司必须进行操作，会计及财务，工程，以满足华尔街的季度盈利预期。这种短期的季度盈利报告，这取决于外部分析，重点较长期的功能和目标，如研究和开发，资本支出和养老金的资金，可以降低优先级的名字，但几个例子。在试图操纵财务报表，一些上市公司的弱势员工的养老基金，而养老金的投资预测过于乐观的预期回报
细节管理 – 他们是谁。