Company Secretarial Library

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What you should know before incorporating as a Limited Company

What is a Limited Company?

A limited company, also known as a Private Company Limited By Shares, is the most popular company type in Ireland. Close to 90% of companies registered in Ireland are incorporated as Limited companies.

The primary characteristics of a Private Company Limited By Shares are:

  • The company name must end with the suffix Limited (LTD) or Teoranta (TEO).
  • Members have limited Liability. The liability of the shareholders of the company is limited to the amount, if anything, that is left unpaid on shares that they have taken.
  • A limited company can have a sole director.
  • Limited companies must have at least 1 shareholder and no more than 149 shareholders.
  • There is no requirement to state the Authorised Share Capital of a limited company. The Share capital can be unlimited.
  • Limited companies can now have a single document Constitution.
  • Limited companies have no Objects Clause and are able to enter into any activity that it sees fit.
  • Limited companies can avail of audit exemption if they are under specified size thresholds.
  • Limited companies can not list debts and securities.
  • Limited companies may not engage in the business of credit institutions or insurance undertakings.
Tax and VAT Registration for Irish Limited Companies
What are the benefits of Incorporating as a Limited Company?

The popularity of limited companies is reflective of the fact that they offer flexibility and are less administratively burdensome than other company types.

  • Limited Liability - The liability of the shareholders of a Limited company is limited to the amount that remains unpaid on shares taken in the company. E.g. if a shareholder has taken 100 shares at €1 each, the liability of this shareholder is capped at this amount.
  • Tax Considerations - The profits of a limited company are taxed under the Corporation Tax system at a rate of 12.5%. In contrast, a sole trader is taxed under the Income Tax system. Tax considerations alone however should not be the reason for considering to incorporate as a Limited company and we strongly advise that you speak to a tax professional before making the decision to do so.
  • Raising Finance - Limited companies have the ability to raise both equity and debt finance. New shares can be issued to raise equity and the company can take on debt as an entity distinct from any individual member.
  • Separate Entity - A limited company is a separate and distinct legal entity to its members. This entity can enter contracts, own property, hold bank accounts and can sue and be sued.
  • Business Credibility - The statutory reporting and filing requirements placed on an incorporated company, by irish company law, provides third parties dealing with that entity more visibility and confidence in their dealings with them.
  • Perpetual Succession - The company continues to exist after and despite the potential death, bankruptcy or any other matter that may bring to an end the participation of any one shareholder.
How long does it take to set up a Limited Company?
The incorporation process takes between 5-10 days, depending on processing demands at the CRO and if there are any queries related to the application.
Can I set up a Limited Company with only one Director?
Yes. Unlike other company structures available, limited companies in Ireland only require one director to incorporate.
Can a company director also act as company secretary?
Yes. A director can also act as company secretary provided there is more than one director in the company.
What responsibilities come with incorporating as a Limited Company?

While incorporating as a limited company offers a number of benefits, those considering doing so should also be aware that there are administrative, statutory and disclosure obligations that all limited companies must adhere to:

Tax and VAT Registration for Irish Limited Companies
Register Your Limited Company From Only €99 + VAT
What are the minimum statutory requirements to set up a limited company in Ireland?
Do all company directors need to be resident in Ireland?
No. Irish company law requires that at least one director be an EEA-resident individual, not necessarily resident in Ireland.
Do I need to file an annual return if my company has not traded?
Yes. All limited companies, without exception, must prepare annual financial statements and file an annual return with the Companies Registration Office.
Is my Registered Office Address searchable online?
Yes. The Registered Office Address of all limited companies in Ireland is searchable on the Companies Registration Office website.
What are my duties as a director of an Irish Limited Company?

When the directors of a company are appointed, they must sign a statement accepting that they have legal duties and obligations.

"I hereby consent to act as director of the aforementioned company and I acknowledge that as director, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law."

Some examples of the statutory duties of directors include to:

Can a company hold the position of company director?
No. While the position of company Secretary may be held by a registered company only natural persons can act as a company director.
Can a minor hold the position of company director?
No. Company directors must be 18 years of age or older.
Do you need qualifications or experience to act as company director?
No. There are no limitations with regard to qualifications or experience required to be a company director.
Do you need to be resident in Ireland to act as director of an Irish company?
No. Irish company law requires that at least one director be EEA-resident. There is no requirement that directors be resident in Ireland.
What powers do the directors of a company have?
The directors of a company can make decisions that are within the law and the powers granted to them by the company's constitution.
Can a director be liable for a company's debts?
Directors may be held liable for a company's debts if it is demonstrated that the company's directors breached company law and their actions caused the company to enter liquidation.

Further Guidance and Assistance

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