11 Steps for setting up a limited company in Ireland
If you are thinking about setting up a business in Ireland then one of the most popular options is to choose a Limited Company.
The most common version, known formally as a ‘private company limited by shares’, carries some very useful advantages for people that want to start out in business but don’t like the idea of a personal liability for any debts that the company may incur.
If you want to know more about how to set up a limited company in Ireland then this is a great starting point but remember that if it all seems a bit much, we can form limited companies from only €149.
1 – Choose a suitable name
When you are thinking about how to set up a company in Ireland it is important to remember that there are specific rules that govern how you can name your company.
You mustn’t use the same name as another company already on the register and this includes things that sound similar.
For example, you wouldn’t be able to use 2mato Limited if there was an existing company called Tomato Limited.
You can’t use names that suggest that you are sponsored or endorsed by the state and if you want to use certain words like ‘University’ you’ll need permission from the Department for Education.
Your company name must end with the word ‘Limited’ or ‘Teoranta’.
There are many more rules around naming your company and if you get them wrong you could end up having to change things like website domains and printed stationery so it is always best to take advice before settling on your final version.
2 – Decide on your ownership and share structure
There are two points here; the type and the number of shares that you issue.
The most common type of share would be an ordinary voting share. As its name suggests shareholders of an ordinary share are allowed to vote at meetings and share in the profits of the company.
Other share types have different (or no) voting rights or may have the right to take their dividends before other shareholders.
If you are thinking about using anything other than an ordinary share we do suggest you speak to an expert first.
When you set up a company you need to choose how many shares you will make available, how much they will be worth and how many you will buy (subscribe) for.
There aren’t really too many rules around this but save to say that you should make sure you authorise a good number of shares as if you choose to sell more at a later date but have reached the limit of your authorised share capital then there may be problems. €100,000 of authorised capital is a common amount.
You can price your share at whatever value you want and this often ranges between €0.01 and €1.00 each.
It is important to note that the first subscribers don’t have to buy all of the shares. In fact, there are many companies that never sell their entire authorised share capital.
So you could have an authorised share capital of €100,000 but only sell €100 worth of shares. This is entirely up to you.
Also when you are setting up a company in Ireland the value of the share is largely irrelevant. For example, you could choose to price your shares at €1 each and sell 100, or you could price them at €0.01 and sell 10,000, the effect would be the same.
But you do need to remember that when you pay for your shares the money becomes the property of the company, so you do need to pay it over!
At this point, you would then buy your shares.
3 – Choose your shareholders
It’s important that you think about your shareholding carefully when you are setting up a company in Ireland.
The number of shares you hold is directly related to its proportion of all of the share sold.
So if you buy 51 out of 100 then you will have control of the company. If you buy 49 then you won’t.
When you are selling shares it is really important to get a good shareholders’ agreement in place so that in the case of any disputes, there is a mechanism for finding a way forward.
4 – Get a local office
If you wish to set up a company in Ireland then you need to have a registered office.
This is the official residence for your Irish limited company and needs to be a physical address in the state. This means that PO boxes and virtual addresses are not allowed.
The registered office is where all legal documentation will be sent and in theory where members of the public can inspect certain documents such as the share register and also deliver letters.
5 – Find a company secretary
The company secretary post is an important one as they handle all of the returns of the company, manage the minutes of board meetings and notify the CRO of changes such as resignations or appointment of directors and a new registered office.
Companies with more than one director can appoint one of the board members to act as company secretary but where there is only one director then a separate individual needs to be chosen.
The post of company secretary is a very important one and it is vital that someone with experience is chosen as getting it wrong can end up costing you money.
Fusion Formations provide a very cost-effective and professional company secretarial service that is suitable for all types of limited company.
6 – Go online
If you want to set up a company in Ireland then the only way to do this now is to complete form A1 online through the CORE system.
Registration on CORE is required and you must have a method of payment.
You’ll need to get all of your documents in order including a written constitution and making a mistake here can take an age to unwind and of course, there will be a fee to pay.
7 – Order a company seal
When you have received confirmation that your company has been created then you must order a company seal.
This is a way of stamping official company documents to prove their authenticity.
The company seal is used on things like share certificates, contracts and deeds.
If your business is working with organisations that require these forms of documents then you will need to ensure you have a company seal ready to use at any point.
It is also important to note that if you change the name of the company at any point then you will need a new seal.
8 – Issue share certificates
Once you have your seal then you can issue share certificates to your founder investors.
There is no official format of share certificates and some companies use a document that is more ornate than others but it does need to be signed by two directors and of course stamped with the company seal.
You’ll need to make sure these are sent out to the shareholders within two months of incorporation.
9 – Register with The Revenue
When you start a company then you must register for tax with The Revenue. You can only do this once you have your company registration number from the CRO.
The very minimum requirement is to obtain a company Tax Reference Number (TRN) but the same form (TR2) can also be used to notify The Revenue when you want to register for Corporation Tax, PAYE, VAT and Relevant Contracts Tax which makes the process a little easier.
10 – Set up a company bank account
If your company wants to do any business then you are going to need a bank account.
Now that you have your company registration number you can go ahead and apply to your favourite bank for an account and other banking facilities.
As you would expect the bank will check the existence of the company but they will also be legally required to do Anti-Money Laundering checks on the directors and main shareholders so you’ll need to have things like proof of identity.
11 – Don’t forget your filings
The final tip for people who are thinking about setting up an Irish limited company is to make sure you have a note of your filing dates.
If you have a professional company secretary then they will take care of this for you but you do need to remember that there are required filings for both the CRO and The Revenue so make sure that you set a reminder for a couple of weeks before each date.
You’ll need to make sure you have completed a Registration of Beneficial Ownership return when you are incorporated and there will be an annual return to the CRO.
You’ll also need to make filings as you go along when things change for your company like the registration of a charge, change of directors or a change of registered office.
There’s a comprehensive list on the CRO site here.
12 – Get professional help
It is definitely possible for anyone to register a limited company in Ireland but the questions you have to ask yourself is it worth it?
When you consider that cost of setting up a company in Ireland could be as low as €149 when you do it through Fusion Formations then it makes sense to let the professionals take the strain.
You’ll find that you get a better result and it takes a lot less time and effort on your part.
Contact us now and let’s get the process of setting up your Irish Limited Company underway.