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Types of Companies in Ireland

Types of Companies in Ireland

Updated on Monday 07th August 2017

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Businessmen who are actively seeking for a location where they can set up a new business can choose Ireland, which is one of the main economies in Europe. The Irish authorities have created a suitable business environment which is appealing to both local and foreign investors.
 
It is important to know that Ireland applies a small corporate tax, of only 12.5%, being the second lowest corporate tax applied by a jurisdiction within the European Union’s area. The commercial legislation was modified in 2014 and, under the regulations of the new Companies Act, there are new types of legal entities that can be set up by foreign investors; our team of lawyers in Ireland can offer more details on the legal aspects referring to the company types in Ireland
 

Types of Irish companies  

 
Those who want to establish a company in Ireland should study the regulations imposed under the new Companies Act, which created new types of companies, enlarging as such the legal possibilities referring to the management of the capital and rights of the shareholders
 
 
The following video offers in-depth information on the types of companies available in Ireland:
 

 
 
The Companies Act mentions the following legal entities which can be incorporated as limited companies:  
 
private company limited by shares (LTD) – the liability of the shareholder is limited to the number of shares he or she owns in the company;
 
designated activity company (DAC)  limited by shares  – the management of the business can carry out only specific activities, as mentioned in the statutory documents;
 
designated activity company (DAC) limited by guarantee – in a DAC limited by guarantee, the company’s shareholders are liable for the company’s debts in the amount of the shares they own in the company (a provision applicable to the DAC limited by shares), but also in the amount they have contributed to the company’s capital
 
company limited by guarantee (CLG) – the legal entity is recommended for charitable organisations, as they do not require a minimum share capital;
 
public limited company – the minimum share capital is established at EUR 25,000 and the shares of the company can be sold on the stock market to the general public. 
 
The Companies Act 2014 also prescribes the following ways to start a business in Ireland
 
unlimited company
 
societas Europaea company;
 
single member company;
 
undertakings for collective investments in transferable securities;
 
European economic interest groupings;
 
cross border merger
 
Below, investors can find out important aspects on the above mentioned legal entities, but it is important to know that our team of Irish lawyers can offer in-depth assistance on each of the business forms that can be set up here, as well as advice on the incorporation procedure applicable to each case.  
 

Private company limited by shares in Ireland  

 
Under the provisions of the Companies Act, the company limited by shares can be incorporated as a private company limited by shares (LTD), which is one of the most common types of companies registered in Ireland. The most important aspect of a LTD refers to the fact that the liability of the shareholders is limited at the numbers of shares owned in the company. This legal entity is regulated by a Constitution, which replaced the usual statutory documents, represented by the articles of association and memorandum
 
There are no minimum share capital requirements and the legal entity is required to have at least one member. The number of the company's members is limited at 149. It is also important to know that there are restrictions related to the transfer of shares and that the shares of this business form can't be sold to a general public. 
 
The LDT is the most preferred type of company chosen for incorporation in Ireland. As mentioned above, the company may have only one director, but in this case, it is necessary to appoint a company’s secretary.
 
The legal entity will need to register with the Companies Registration Office (CRO), just like any other type of commercial company. At the same time, the company is required to file with the CRO various accounting documents, such as the annual return (which has to be deposited regardless if the company performed trading activities or not). The Irish LDT is regulated by the Part 2 of the new Companies Act, on which our team of attorneys in Ireland can offer more details. 
 

Designated activity company limited by shares in Ireland 

 
The designated activity company (DAC) was created under the new Companies Act. The business form represents a limited company governed by a Constitution, which has also incorporated the memorandum and articles of association. The company’s memorandum has to provide information on the objects of activity that will be carried out.  
 
The provisions under which a DAC functions are prescribed by the Part 16 of the Companies Act. When incorporating a DAC, the investor will have to stipulate in the company’s trading name the words “designated activity company”. The company will require at least two directors and a number of maximum 149 members; our attorneys in Ireland can provide more information on this type of company. In the situation in which the company has more than two members, it is necessary to hold the annual general meeting (AGM) and the company can become eligibile for audit exemption if specific conditions are met. 
 

Designated activity company limited by guarantee in Ireland 

 
In a DAC limited by guarantee, the company’s shareholders are required to establish a minimum share capital. It is allowed to modify the contribution of each of the shareholder to the company’s assets in the situation in which the legal entity will encounter various financial difficulties (the company may be in danger of being liquidated or wond-up). This can be completed through a special resolution. 
 

Public limited company  in Ireland 

 
A public limited company can be incorporated if the investors will respect several regulations. For example, it is necessary to have at least seven members in order to register a public limited company (PLC), while the minimum share capital necessary for this legal entity is established at EUR 25,000. During the incorporation procedure, 25% of the company’s capital must be deposited in a corporate bank account
 
Also, investors should know that the shares of a PLC can be transferred to a general public and, at the same time, they can be traded on the stock market. In a company operating as a PLC, the investors will need to appoint at least two directors, and it is also required to hold the annual general meeting (AGM)
 

Company limited by guarantee in Ireland 

 
In a company limited by guarantee (CLG), the company’s founders are liable for the company’s debts in the amount they have contributed to the company’s assets. It is important to know that the amount can’t exceed the value stated in the company’s memorandum
 
In a CLG, the company’s shareholders are not required to set up a minimum share capital, as prescribed by the Part 18 of the Companies Act (which provides the regulatory framework for this type of company). 
 

 

Unlimited company in Ireland  

 
In an unlimited company, the investors will have unlimited liability. The provisions related to this type of business form are prescribed by the Part 19 of the Companies Act, which provides the legal aspects of the following types of unlimited companies available in Ireland:
 
private unlimited companies with share capital;
public unlimited companies with a share capital
 

Societas Europaea company  in Ireland  

 
The Societas Europea (SE) was created in order to remove the legal differences between the commercial legislations available in the European Union’s (EU) member-states. The main idea behind a SE is to provide a comprehensive legal framework applicable throughout EU. A main characteristic of the SE is that the company can be relocated from one EU country to another without having to go through all the required steps (dissolution and re-incorporation).  The legal entity is regulated by the Council Regulation 2157/2001 and the European Communities Regulations 2007. S.I.21/2007.  
 

Single member company in Ireland  

 
As the name suggests, the single member company can be incorporated by a single member, but it is necessary to appoint minimum two directors and a company’s secretary
 
The company is not required to hold the general meetings that are usually prescribed under the applicable legislation.  
 

Undertakings for collective investment in trasferable securities (UCITS) in Ireland  

 
The UCITS is a type of company which is incorporated following the regulations prescibed by the European Union under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 1989 & 1999. The UCITS is incorporated for performing investment activities and it represents a special type of company, as it must be approved by the Central Bank of Ireland, which is the main regulator of the invesment companies operating in this country. 
 

European  Economic Interest Groupings (EEIG) in Ireland 

 
Those who want to open a company in Ireland as a EEIG  will need to follow the regulations prescribed by the SI No. 191 of 1989 - European Communities (European Economic Interest Groupings) Regulations 1989, as well as the SI No. 447 of 2010 European Communities (European Economic Interest Groupings) (Amendment) Regulations 2010.  This type of company is set up for performing trading activities within the EU area
 

Cross border merger in Ireland   

 
In a cross border merger, a company will merge with another legal entity situated in the European Economic Area. The merger can include more than one company, following the regulations of the EU Regulation, Statutory Instrument 157 of 2008
 
Persons interested in receiving more details on the types of companies available in Ireland can address to our Irish law firm, where they can receive legal assistance from our lawyers for the incorporation of any of the above mentioned business forms. Do not hesitate to contact us if you need consultancy services for the incorporation of an Irish company.   
 

 

Comments

  • Denise 2016-07-15

    hello. I am interested in knowing more details about the Societas Europaea. More exactly, which are the main advantages of opening this type of company. Thank you.

    Hello Denise! Please send us an e-mail at: office@lawyersireland.eu  and one of our corporate lawyers will answer you as soon as possible.
    Have a great day!

  • Adrien 2016-12-19

    Hello! I think that the SE is an attractive business entity for investors who want to operate on as many European markets as possible. I wonder how popular this legal entity has become since its creation..

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