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Setting up a Limited Company in Ireland

Updated on Friday 18th January 2019

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Types of limited companies in Ireland
 

The Irish Companies Act underwent significant changes in 2014. These changes reflected into the introduction of several new types of limited liability companies in order to provide more flexibility to foreign investors who want to open a business in Ireland. Investors interested in setting up a limited company in Ireland, should know the particularities of the main types of Irish limited liability companies:
 
  • private company limited by shares (LTD) -  in this type of company, the liability of the shareholders is limited to their contribution with the company’s capital;
  • designated activity company (DAC) limited by shares – this business form was established under the new Companies Act and it is defined by the fact that is can only enter the business activities that were stipulated in its incorporation documents;
  • designated activity company limited by guarantee – in this case, the business form must be incorporated with a share capital;
  • company limited by guarantee (CLG) – it is characterized by the fact that the company must have at least two directors and it is generally incorporated by businessmen activating in the fields of property management, sports and social activities;
  • public limited company (PLC) – it has no restrictions regarding the number of shareholders that can start the company and it may also be used for listing on the stock exchange.
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Businessmen who are interested to find out more information on the limited liability companies can watch the video below related to the registration an Irish private limited liability company:
 
 

 
Our company formation experts in Ireland can provide assistance for the registration procedure of any of the above mentioned companies. An important detail related to the Irish Companies Act 2014 is that it represents the largest legislative document registered in Ireland, as it contains 1448 sections. The Act became applicable in Ireland starting with 1st of June 2015
 
The document provides a comprehensive image for the procedure of company formation in Ireland, for the rights and obligation the company’s directors must exert, but also provisions related to the company’s secretary. It also stipulates provisions for the registration of a branch office or a subsidiary in this country, the issuance of company’s shares, the reduction of the company’s capital and others, which can be presented by our team of specialists in company registration in Ireland
 

The process of setting up a limited liability company in Ireland 

 
The new Commercial Code does not impose a minimum share capital to private limited liability companies in Ireland. Only public limited companies are required to have a minimum share capital of EUR 25,000 of which at least 25% must be deposited before the company starts operating.
 
In the case of private limited liability companies, the members’ liability will be limited to the amount of the shares they own, in the situation in which the Irish company is closed down. Other characteristics of the private limited companies in Ireland are presented below: 
 
  • private and designated companies may have a maximum number of 149 shareholders;
  • the Irish private limited liability company may have only one director;
  • the DAC limited by shares and by guarantee must have at least two directors; 
  • the Part 9 of the new Companies Act stipulates that a LTD can enter a merger and acquisition procedure. 
 
 
Foreign businessmen who are interested in setting up a limited company in Ireland must know that the registration of a DAC company requires as a statutory document a constitution. Mot of the legal entities are incorporated based on the memorandum and the articles of association. The constitution should provide the following information, as prescribed under Chapter 2, section 19: the company’ name, its business form, information on the liability of the shareholders as well as the value of the minimum share capital that has to be subscribed. 
 
At the same time, the Act provides another option related to the company’s capital, in the sense that the capital is not directly stated, but that it will be divided into shares with a fixed value, at the moment when the company is registered.  
 
Also, the Act provides new regulations related to the manner in which the private companies in Ireland must keep their accounting records. It is also important to know that the company’s secretary should have sufficient skills in order to receive this function within the company’s structure. Investors interested in receiving additional information about the new Commercial Law 2014 can find out more from our team of Irish company formation specialists.

What are the main characteristics of the Irish DAC?  

 
The Irish DAC is founded based on a constitution, which is represented by the company’s memorandum and articles of association. The manner in which the Irish company formation procedure is completed for the DAC company is given by the Part 16 of the Companies Act. Investors should also know that the Irish DAC is represented by the following: 
 
  • it can benefit from audit exemption and it may also request audit exemption as a dormant company;
  • the company must state in its trading name the words “Designated Activity Company”;
  • the above mentioned regulation is imposed regardless is the company was registered as a new entity or if it was converted from another type of business form;
  • it must have authorized share capital and it is necessary to appoint minimum two directors. 

Registration of private limited liability companies in Ireland 

 
In order to register a private limited liability company, the founders or their representatives are required to file the company’s constitution with the Companies Registration Office in Ireland. The new Companies Act specifies that private limited liability companies are no longer required to draft the memorandum and articles of association when forming a company in Ireland. Also, the articles of association are no longer required to contain the object of activity of the company. The incorporation procedure has also been simplified, all documents and forms being submitted online.
 

Features of an Irish private limited liability company 

 
Persons interested in opening a company in Ireland should know that the private limited liability company is allowed to have only one director in the case in which he or she can’t have the function of a company’s secretary. At the same time, the directors must be at least 18 years old in order to have this function in the company
 
Investors interested in setting up a private limited liability company in Ireland should know that the statutory documents of the company do not have to state the activities carried out by the future business. Just like in other European jurisdictions, such as Norway, the private limited liability company is the most common type of legal entity chosen by local and foreign investors for incorporation in Ireland.
 
An important aspect is related to the fact that the management of the company is required to submit annual returns every year with the Companies Registration Office, even if the business had no financial activities. Under the new Company Act, the mergers and acquisitions performed by private companies are no longer required to obtain a court approval. 
 

How to set up an Irish CLG  

 
The Irish CLG is regulated by the Part 18 of the Companies Act; just as in the case of the Irish DAC, the CLG has to appoint at least two directors and it has to be founded based on a constitution. As a general rule, all companies that are registered under this business form have to state in their company’s trading name the words “Company Limited by Guarantee”, but the legislation stipulates an exemption in this case, which is applicable to businesses that fall under the provisions of the Section 1180.  
 
 
In the situation in which a private company in Ireland must be shut down due to various reasons, the new Act states better provisions, regulating the relations between the company’s members and creditors. If you are interested in setting up a limited company in Ireland, please address to our Irish company formation consultants. If you are interested in opening LLCs in other countries, such as Portugal, Liechtenstein and Montenegro, we may help you with information about our local partners.

 

Comments

  • Angus 2016-03-30

    The Companies Act 2014 had a powerful impact over the business environment in Ireland. I believe that the positive financial results obtained by Ireland in 2015 and 2016 are also an effect of the new types of companies available for local and foreign entrepreneurs.

  • Eddy 2017-01-10

    The new Companies Act does offer a more flexible way of doing business, which should increase tha participation of young entrepreneurs in the business environment.

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