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FORMING A COMPANY IN THE REPUBLIC OF IRELAND
Company Types
Listed below are the different types of company which may be registered;
LTD – New model private company
PLC – Public Limited Company
PUC – Public Unlimited Company
ULC – Private Unlimited Company
External Companies
Investment Companies
DAC – Designated Activity Company
CLG – Company Limited By Guarantee
PULC – Public Unlimited Company w/out share cap.
SE – Societas Europaea
Unregistered Companies
Joint Stock Companies
However, the most commonly used company type by far is the Private Limited Company or ‘LTD’.
Companies which need to be incorporated for a very specific and stated purpose e.g. a joint venture, a film
production attracting tax relief, or charitable objects, will tend to favour the Designated Activity Company (DAC)
Incorporation Time
A new company can be registered in one to five working days from date of application, subject to the name
being acceptable. ‘Ready Made’ Companies were abolished in 1999. However, pre-formed companies
occasionally become available and can be purchased, generally, at a higher cost than forming a new company.
Name Approval
The Registrar, will only refuse a name if it is identical, or almost identical to an existing name, implies State
sponsorship or is generally thought to be offensive. Use of certain words such as “bank”, “insurance”, and “group”
require special permission. Companies wishing to make an objection to a new company name have six months
within which to do so. Names may be reserved for a 28-56 day period at a cost of €25-€50.
Directors/Secretary
A minimum of one Director is required for an ‘LTD’ company. However, a separate and ‘suitably qualified’ company
secretary must be appointed in this case. All other company types require TWO Directors. Where there are two or
more Directors, one may also act as Company Secretary. A corporate Secretary is permissible. The Directors can
be any nationality and located anywhere.
One Director must be resident (i.e. at least 183 days per annum) in the European Economic Area (EEA). If a
company has no EEA resident Directors, then it may enter into a Bond for €25,000. The Bond is arranged by
obtaining an insurance policy. Alternatively, if the Company can prove that it has a “real and continuous link with
one or more economic activities in the State” then it may be exempted from the requirement for an EEA Director.
The Revenue decide if there is a “link”. Further guidance on this issue is available from our office.
Shareholders
Only one shareholder is required to form an LTD, a Public Limited Company and an Unlimited Company. A
Company Limited By Guarantee may have a sole member. Designated Activity Company’s require a minimum of
TWO shareholders. Bearer Shares are not permitted in Irish Private Companies. Shares may be held “In Trust”
Authorised & Issued Share Capital
The “Authorised” share capital of a company is an arbitrary figure for the total number of shares that can be issued
in a company. In order to avoid having to increase the authorised share capital at a later stage it is usually set at a
very high figure such as €1,000,000.
The “issued” share capital is the shares, which have actually been allotted and paid for by the shareholders. Unlike
the rest of mainland Europe, there is no large minimum share capital requirement for the formation of an Irish
company. Accordingly the minimum issued share capital could be as little as € 0.01LTD companies have the option
not to state an authorised share capital.
Registered Office
The Registered Office of a company is the address for the company, which is recorded in the Companies
Registration Office. It is the address to which most official correspondence is sent. The trading address of the
Company maybe different from it’s registered office. It may not be a Post Office box.
Place(s) of Business and Address of Central Administration
There is a requirement to identify the places in the State where the Company will carry on business, together with
an obligation to nominate an address, whether in the State or not, where the central administration will be carried
on. For most new businesses, each of these addresses will be at the same location.
Constitution
The internal and external activities of Irish companies were previously regulated by their Memorandum & Articles
of Association. This has now been replaced with a ‘Constitution’. This simple document applies all of the
regulations of the Companies Act 2014 to the subject company and sets out, by exception, the regulations which
do not.
In the case of an ‘LTD’ there is no defining main objective of the company as LTD’s have the full legal capacity of
a natural person i.e. the rule of Ulta Vires does not apply.
Annual General Meetings
An Annual General Meeting must be held within eighteen months of incorporation, and every year thereafter
provided that fifteen calendar months do not elapse between A.G.M.’s. The main purpose of the A.G.M. is to
present the accounts to the members. If a Company’s Articles permit, the AGM can be held outside Ireland
Accounts
Accounts must be prepared and laid before the members. Accounts together with an auditors certificate have to
be filed in the Companies Office, and are available for public inspection. The level of information given in filed
accounts varies with the size of the company and are prepared as “Small”, “Medium”, or “Large”.
Audit Exemption
If a company meets certain conditions, such as having a turnover of less than €8.8m, a balance sheet total of
€4.4m and employs less than 50 people and is not otherwise prohibited, it may be exempted from having its
accounts audited. The company must still file it’s accounts with the CRO. Companies which are in a “group” may
also claim audit exemption provided the group, as a whole, meets the same criteria.
Auditors
Where a Company has appointed Auditors they must be Registered Irish Auditors under the 1990 Companies Act.
Certain non-Irish auditors, such as member s of the Institute of Chartered Accountants in England and Wales
qualify to act. The Auditors are usually re-appointed at the A.G.M. each year. Auditors are obliged to make a
report to the Office of the Director of Corporate Enforcement where they find a breach of certain Indictable
offences under the Companies Acts, while conducting an audit.
Annual Return and Annual Return Date (A.R.D.)
An Annual Return gives details of authorised (if stated) and issued share capital, members, directors and
secretary and must be filed with the Companies Registration Office (C.R.O.) along with the company’s accounts.
The first annual return is made up to a date six months after the date of incorporation, and must be filed within
twenty eight days of this date in order to avoid being “late”. If this deadline is missed the company incurs an
automatic €100 penalty PLUS a further penalty of €3 per day . Accounts do not have to be attached to this first
annual return.
The next annual return is made up to a date twelve months after the date of the first annual return.- effectively
eighteen months from the date of incorporation. The anniversary of this date becomes the company’s “Annual
Return Date” (A.R.D.)
Taxation
Tax on a company’s ‘trading’ profits is currently set at 12.5%. while non-trading income is taxed at 25%. The
distinction between trading and non-trading is particularly important for overseas clients wishing to establish a
presence here as without sufficient “substance” in Ireland here they could inadvertently become liable to the
higher rate, and possibly liable to tax in their home jurisdiction. Further guidance on this issue is available
from our office.
Value Added Tax (V.A.T.)
While Irish businesses are obliged to register for VAT once they reach sales of at least € 37,500 for services and
€ 75,000 for goods, these sales must be to Irish based customers. As such the Revenue exercise a certain
amount of discretion when assessing applications to register for VAT from companies with an overseas
involvement. A company can also be de-registered if these levels of sales are not maintained. The Revenue
conduct VAT Audits on a random basis. However a company which is in a constant VAT refund situation is more
likely to be selected. The current top rate of VAT for supply of goods and services is 23%