Company Formation

What is an Irish Limited Company?

The primary advantage of limited liability companies is that they are all based on the simple principle that the liability of the shareholders/subscribers and officers is strictly limited to their direct investment in the company. Generally, the only exceptions are when some kind of fraudulent or grossly reckless act or omission has occurred involving the aforementioned. It is important to note that the 'innocent' shareholder without any involvement in the malfeasance will not lose the benefit of limited liability.

Basic Types of Irish Limited Liability Company

A Private Company Limited by Shares

Most common type of company in both the Republic and Northern Ireland. The principal purpose is to earn profits for the shareholders who may or may not be the same as the Director(s) or Secretary. These companies can be formed and registered with as little as one Euro (€1.00). In most cases, they adhere to a standardized format and are remarkably inexpensive. The principal governing legislation for all companies is the Companies’ Acts 1963-2012 and is generally seen as being one of the most developed company law statutes in the World.

A Public Company Limited by Shares

Most common type of company in both the Republic and Northern Ireland. The principal purpose is to earn profits for the shareholders who may or may not be the same as the Director(s) or Secretary. These companies can be formed and registered with as little as one Euro (€1.00). In most cases, they adhere to a standardized format and are remarkably inexpensive. The principal governing legislation for all companies is the Companies’ Acts 1963-2012 and is generally seen as being one of the most developed company law statutes in the World.

A Company Limited by Guarantee

This is a company, which has not been established to earn profits for its members but rather to carry out a particular purpose. Charitable, housing and organizational associations most commonly use this type of vehicle. The price of such a company will vary greatly depending on its intended use. - If you think that you may require this type of company please contact our offices by e-mail or by telephone.

General Advantages of Irish Limited Liability Companies

  1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders;
  2. Company Officers are not personally liable for their actions unless, in most instances, there is a clear and serious breach of their fiduciary duty;
  3. Ironically, despite the limited liability, such entities often benefit from 'greater prestige' than their sole proprietorship or partnership counterparts. The reason is probably because such an enterprise normally requires more planning and thus is deemed more credible;
  4. They often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity;
  5. The rights of shareholders are normally clearly defined and protected. Promotes good record keeping;
  6. Corporate taxes only become payable after the end of the financial year. This means that money that would otherwise be taxed on a monthly or quarterly basis is available to earn further money before the final payment of tax;
  7. The Irish corporate tax rate is only 12.5% for all trading companies;
  8. Foreign holding companies based in the European Union can avail of EU Directives such as the Parent Subsidiary Directive 90/435 which allows dividends to be paid from an Irish company without any withholding taxes

Disadvantages

  1. In larger companies shareholders often lose direct control over their investment;
  2. Limited liability companies generally require the appointment of accountants, auditors and professional company secretaries. This means that such a structure is often more expensive to maintain than simple sole proprietorships or partnerships;

Certain professional bodies, especially those representing the legal and medical fields, do not allow members to register a limited liability company. In many instances, this denial has resulted in very high indemnity insurance.