REPORT ON THE COST AND BENEFITS OF A CONSTRUCTION COMPANY TRANSFORMING INTO A PLCIntroduction At the beginning of this century more than 2000 construction companies, organizations were formed fiercely independent mutuals in the spirit of Victorian self-help. Now there are only 71. Some of these that have disappeared were companies that closed with a fixed liquidation date. The last “terminating”; company was Fist Salisbury, which ended in 1980. Other companies were swallowed up in takeovers or transformed into banks in the great demutualization of 1997. This paper will discuss this trend with particular reference to the potential short- and long-term costs and benefits. long term. This assignment will examine the costs and benefits to building societies as well as those to members and staff. Costs and benefits to the building society Conversion to plc status is seen as having the main advantage that there would be freedom from the limitations imposed by the Building Societies Act 1986, 1997, the regulatory framework for the Building Societies sector. Restrictions imposed by law include the following: 1) 75% of all loans must be secured by residential property. This means that building societies are limited in their participation in the riskier, but more profitable unsecured loans. Currently, companies can make unsecured personal loans up to a limit of £15,000 per customer, while there is no cap for banks. Building societies with less than £100 million in assets are not allowed to make unsecured loans. 2) No more than 50% of funds can be raised on wholesale markets. This limit was previously 40% before the revision of the 1997 Building Societies Act. Seized the opportunity to raise funds in wholesale markets, which often proved to be the cheapest source of wholesale funds (wholesale funds are large deposits placed by companies and financial institutions, with an interest rate in line with the market rate rather than base rates). They used these funds to make up for any shortfalls in the inflow of retail funds to meet mortgage demand. Banks have no limit on raising wholesale funds, which are usually cheaper than retail funds. Building societies may also be at a disadvantage in accessing wholesale funds at competitive rates. Since only 50% of funds can be raised from the wholesale market, only the largest companies can maintain the necessary position on the international capital markets that allows them to tap into wholesale funds under the best conditions.