What is a Private Company Limited By Shares
All You Need to Know About Private Company Limited by Shares
Having a business idea leads to the formation of a business entity which gives you the freedom and an identity to promote your business idea. In Ireland, the most common form of business entity is a Private company limited by shares (LTD). The reason for the popularity of this company structure is that the company operates as a separate legal entity. This means that the owners of the company only have a limited financial liability, which is restricted to any amount unpaid on the shares. So, where the company runs into financial crisis, the personal assets and property of the owners remain protected.
Lets Have A look at the Benefits of a Company Limited by Shares
- The biggest advantage is that if a limited company becomes insolvent, the personal finances of the shareholders remain protected. This is a key benefit in comparison to the sole trader form of business, where the sole trader becomes liable for business liabilities;
- Secondly, the ownership in the company can be passed on, for instance in the event of death of the shareholder. Since the company limited by shares is a separate legal entity from its owners, the ownership can easily be transferred;
- In contrast to a Designated Activity Company, an LTD company does not have a set objectives clause in its Constitution, so it has a greater flexibility in terms of carrying out any type of legal business activity that the directors and shareholders deem fit;
- Where a company limited by shares is a micro or small sized one, it has the advantage of filing condensed version of accounts. Furthermore, it can avail the advantage of not having to get the accounts audited;
- Limited companies have a greater credibility and therefore appear more appealing to the potential clients.
Filing Responsibilities of a Private Company Limited by Shares
A private company limited by shares needs to follow certain requirements with regards to filing and submission of documents. Every LTD company is required to submit the annual return along with the financial statements each year, to the Companies Registration Office. The company tax return is also required to be filed with the Revenue.
Setting Up a Private Company Limited by Shares
Private Company Limited by Shares is a simplified entity. With all the advantages and simplicity that it offers, the incorporation process is just as simple.
A brief of the key points in setting up an LTD company are as under:
- A company name that is unique from already registered names;
- A registered office that is a physical address in Ireland;
- At least one director and a shareholder;
- A separate company secretary to look after the company secretarial matters.
Though there are more filing and administrative requirements involved in operating a limited company in contrast to a sole trader, but the benefits of forming one still outweigh any disadvantages. You can either set up a limited company online or get a company formation agent do this for you.