How do you set up a company in Ireland

How do you set up a company in Ireland?

Here are the 7 things you’ll need to consider and think about when you want to find out how to set up a company:

 

1) Choose your business type

 

Private limited companies are (usually) either ‘limited by shares’ or ‘limited by guarantee’ – the two most common types. Limited by shares companies are usually businesses that are in business for the sole purpose of making a profit. This means the company:

• is legally separate from the people who run it
• has separate finances from your personal ones
• has shares and shareholders
• after tax, can reinvest or pay out dividends on any profits it makes

Limited by guarantee companies are usually ‘not for profit’. This means the company:

• is legally separate from the people who run it
• has separate finances from your personal ones
• has guarantors and a ‘guaranteed amount’
• invests any profits earned back into the company

How you set up your business depends on what sort of work you do. It can also affect the way you pay tax and get funding. There are three other types of limited company that needs mentioning though:

1. A DAC (Designated Activity Company) – (limited by shares). The members’ liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold.
2. A DAC – (limited by guarantee, (Designated Activity Company Limited by Guarantee). The members have liability under two headings; firstly, the amount, if any, that is unpaid on the shares they hold, and secondly, the amount they have undertaken to contribute to the assets of the company, in the event that it is wound up.
3. A Public Limited Company (PLC): The liability of members is limited to the amount, if any, unpaid on shares held by them. It should be noted that it is unlawful to issue any form of prospectus except in compliance with the Companies Act 2014.
4. Click here for further information.

Check if you should set up as one of the following instead:

• self-employed (‘sole trader’)
• a business partnership
• a social enterprise
• an overseas company
• an unincorporated association

 

2) Choose a name

 

You can’t just name it anything you like – and the chances are that you will have to alter it somewhat to get the name you want. Remember though, your company name does not have to be the same as your ‘trading as’ name (business name registration name):

• Check the rules for company names (names can’t be same as someone else’s, like someone else’s, or sensitive in terms of profanity)
• Check if the name you want is available (check URLs, Search4less, CRO, or even just Google it)
• Check existing trade marks

 

3) Choose directors and a company secretary

 

You must appoint a director but you do not have to appoint a company secretary.

Find out key dates you need to be aware of as a first-time director

At least one director must be full-time resident in the EEA. Directors who are resident outside Ireland are obliged to pay tax in Ireland.

Company directors in Ireland are solely responsible for ensuring that the company is compliant with the law, and that the company’s returns and taxes are returned/paid on time.

If you don’t have someone to help as a Company Secretary, we can provide you with this service.

 

4) Decide on shareholding

 

You need at least one shareholder or guarantor, who can be a director. A minimum of one shareholder is required (for obvious reasons) however the company directors can also be shareholders. An existing company can also hold shares of an Irish company (such as a parent company, for instance, if a company holds 51% or more of an Irish company’s shares this is known as a Subsidiary company).

Share Structure

The minimum recommended Share Capital for Irish companies is 100 shares valued at €1 each. This can be held as cash up to a maximum of €1,000 at which point it will then need to be held in a corporate bank account.

 

5) Prepare Company Documentation

 

The first steps involved getting a few documents submitted to CRO.ie with your incorporation fee.

1. Company Constitution (Articles of Association)
   • For a simple company limited by shares you will only need to prepare ‘articles of association’, which usually come in the form of a single-page constitution.
2. You will also need to apply for FORM A1
   • Once you’ve applied and been given the form, you will need to sign it. This is merely a ‘declaration of compliance’.
3. You need to submit these documents with the registration fee of €50

For every other company formation, you will need a memorandum of association – each type of company has it’s own schedule:

• Private Limited by Shares Company (LTD) – Schedule 1
• Designated Activity Company limited by Shares – Schedule 7
• Designated Activity Company limited by Guarantee – Schedule 8
• Public Limited Company – Schedule 9
• Company Limited by Guarantee – Schedule 10
• Private Unlimited Company – Schedule 11
• Public Unlimited Company having a share capital – Schedule 12
• Public Unlimited Company not having a share capital – Schedule 13
• Investment Company – Schedule 16

 

6) Check what records you need to keep

 

When you are a director of a limited company, you must keep the following accounting records:

• records about the company itself (directors, shareholders, office address etc)
• financial and accounting records (purchases, sales, cash holding, taxes, payroll etc)

You can hire a professional (for example, an accountant) to help with your tax.

The Revenue Commissioners in Ireland may check your records to make sure you’re paying the right amount of tax, so in the interest of preventing fines and time spent going through records, it’s best to get a professional to help.

Further info: 

Records about the company

• directors, shareholders and company secretaries
• the results of any shareholder votes and resolutions
• promises (debentures) for the company to repay loans at a specific date in the future and who they must be paid back to
• promises/indemnities the company makes for payments if something goes wrong and it’s the company’s own fault
• official paperwork when someone buys shares in the company (share notes)
• loans/mortgages secured against the company’s assets

You must tell Companies Registration Office if you keep the records somewhere other than the company’s registered office address.

 

Registration of Beneficial Ownership

You must also keep a register of ‘people with beneficial ownership ’ (control). Your RBO register must include details of anyone who:

• has more than 25% shares or voting rights in your company
• can appoint or remove a majority of directors
• can influence or control your company or trust
• You still need to keep a record if there are no people with significant control

 

Accounting records

You must keep accounting records that include:

• all money received and spent by the company, including grants and payments from coronavirus support schemes
• details of assets owned by the company
• debts the company owes or is owed
• stock the company owns at the end of the financial year
• the stock inventory method you used to work out the stock figure
• all goods bought and sold (receipts/invoices)
• who you bought and sold them to and from (unless you run a retail business/stock for resale)

You must also keep any other financial records, information and calculations you need to prepare and file your annual accounts and Company Tax Return. This includes records of:

• all money spent by the company, for example receipts, petty cash books, orders and delivery notes
• all money received by the company, for example invoices, contracts, sales books and till rolls
• any other relevant documents, for example bank statements and correspondence

You can be fined up to €5,000, be imprisoned up to 12 months, or disqualified as a company director (or all three) if you do not keep adequate accounting records. More detailed info here.

 

How long to keep records

You must keep records for 6 years from the end of the last company financial year they relate to, or longer if:

• they show a transaction that covers more than one of the company’s accounting periods
• the company has bought something that it expects to last more than 6 years, like equipment or machinery
• you sent your Company Tax Return late
• ROS has started a compliance check and instructs you to keep them longer

 

7) Register your Company

 

You’ll need to register an official address and choose a NACE code – this identifies what your company does.

You can register your company’s business name and register for corporation tax at the same time as incorporation.

 

Hurray! Now you can open your own company and get busy.