Irish Company Types

Are you considering starting a business in Ireland and wondering what type of company structure would be best for you? Look no further! In this comprehensive guide, we will walk you through the different Irish company types and help you choose the right one for your business.

Private Limited Company by Shares (LTD)

A private limited company by shares (LTD) is the most common and popular Irish company type. It is a separate legal entity that can own assets, enter into contracts, and sue or be sued in its own name. The shareholders of an LTD have limited liability, which means they are only responsible for the debts of the company up to the amount they have invested in their shares. 

An LTD can have one or more shareholders, but the maximum number is 149. An LTD can also have one or more directors, but at least one of them must be resident in the European Economic Area (EEA). An LTD must have a company secretary, who can be one of the directors or a separate person.

Some of the benefits of an LTD are:

• It has a simple and flexible constitution that does not need to state its objects or activities.
• It can avail of audit exemption if it meets certain criteria, such as having a turnover of less than €12 million and a balance sheet total of less than €6 million.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives.
• It can raise capital from various sources, such as issuing shares, debentures, or loans.

Some of the drawbacks of an LTD are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, and tax returns.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, and share capital.
• It cannot offer its shares to the public or list them on a stock exchange.

Company Limited by Guarantee (CLG)

A company limited by guarantee (CLG) is a type of company that is usually used for non-profit or charitable purposes. It does not have any share capital or shareholders, but instead has members who guarantee to contribute a certain amount to the debts of the company in case it is wound up. 

A CLG can have one or more members, but there is no maximum limit. A CLG must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of a CLG are:

• It has limited liability for its members, who only have to pay the amount they have guaranteed if the company is wound up.
• It can apply for charitable status from the Revenue Commissioners and benefit from various tax exemptions and reliefs.
• It can receive grants and donations from various sources, such as government agencies, foundations, or individuals.

Some of the drawbacks of a CLG are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, and tax returns.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, and guarantee amount.
• It cannot distribute any profits or assets to its members or directors.

Designated Activity Company (DAC)

A designated activity company (DAC) is a type of company that has a specific object or activity stated in its constitution. It is similar to an LTD in many aspects, except that it has more restrictions on its activities and powers. 

A DAC can have one or more shareholders, but the maximum number is 149. A DAC must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of a DAC are:

• It has limited liability for its shareholders, who are only responsible for the debts of the company up to the amount they have invested in their shares.
• It can avail of audit exemption if it meets certain criteria, such as having a turnover of less than €12 million and a balance sheet total of less than €6 million.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives.

Some of the drawbacks of a DAC are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, and tax returns.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, share capital, and objects.
• It cannot offer its shares to the public or list them on a stock exchange.

Public Limited Company (PLC)

A public limited company (PLC) is a type of company that can offer its shares to the public and list them on a stock exchange. It is a separate legal entity that can own assets, enter into contracts, and sue or be sued in its own name. The shareholders of a PLC have limited liability, which means they are only responsible for the debts of the company up to the amount they have invested in their shares. 

A PLC can have one or more shareholders, but there is no maximum limit. A PLC must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of a PLC are:

• It can raise capital from a large and diverse pool of investors, such as institutional investors, retail investors, or foreign investors.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives.
• It can enhance its reputation and visibility in the market by being listed on a stock exchange.

Some of the drawbacks of a PLC are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, tax returns, and prospectuses.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, share capital, and financial performance.
• It has to deal with more complex governance and compliance issues, such as shareholder rights, corporate governance codes, and market abuse rules.

Unlimited Company

An unlimited company is a type of company that does not have any limit on the liability of its shareholders. This means that the shareholders are personally liable for the debts of the company in case it is wound up. 

An unlimited company can have one or more shareholders, but there is no maximum limit. An unlimited company must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of an unlimited company are:

• It does not have to file its financial statements with the Companies Registration Office (CRO), which means it can keep its financial information confidential.
• It does not have to comply with certain provisions of the Companies Act 2014, such as share capital requirements, audit exemption criteria, and dividend distribution rules.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives.

Some of the drawbacks of an unlimited company are:

• It has unlimited liability for its shareholders, who are exposed to the risk of losing their personal assets if the company is wound up.
• It has to comply with various legal and regulatory obligations, such as filing annual returns and tax returns.
• It cannot offer its shares to the public or list them on a stock exchange.

Societas Europaea (SE)

A societas Europaea (SE) is a type of European public limited company that can operate across the European Union (EU) under a single set of rules. It is a separate legal entity that can own assets, enter into contracts, and sue or be sued in its own name. The shareholders of an SE have limited liability, which means they are only responsible for the debts of the company up to the amount they have invested in their shares. 

An SE can have one or more shareholders, but there is no maximum limit. An SE must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of an SE are:

• It can operate across the EU without having to set up subsidiaries or branches in each member state, which reduces administrative costs and legal complexity.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives in Ireland.
• It can choose between two types of management structures: a one-tier system with a single board of directors or a two-tier system with a supervisory board and a management board.

Some of the drawbacks of an SE are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, tax returns, and prospectuses.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, share capital, and financial performance.
• It has to deal with more complex governance and compliance issues, such as employee participation rights, corporate governance codes, and market abuse rules.

Owners Management Company (OMC)OMC

An owners management company (OMC) is a type of company that is used to manage the common areas and services in a multi-unit development, such as an apartment complex or a housing estate. An OMC is a separate legal entity that owns the common areas on behalf of the unit owners, who are also the members of the OMC. 

An OMC can have one or more members, but there is no maximum limit. An OMC must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of an OMC are:

• It protects the rights and interests of the unit owners, who have a say in how the common areas are managed and maintained.
• It ensures that the common areas are kept in good condition and comply with health and safety standards.
• It can apply for grants or loans from various sources, such as government agencies or banks, to fund major repairs or improvements.
• It can benefit from various tax exemptions and reliefs, such as being exempt from corporation tax and capital gains tax on the common areas.

Some of the drawbacks of an OMC are:

• It has to comply with various legal and regulatory obligations, such as registering with the Companies Registration Office (CRO), filing annual returns, financial statements, and tax returns, and following the Multi-Unit Developments Act 2011.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, and financial performance.
• It may face difficulties in collecting management fees from the unit owners, especially if some of them are in arrears or dispute the charges.

External Company

An external company is a type of company that is incorporated outside Ireland but has established a branch or place of business in Ireland. It is not a separate legal entity from its parent company but is subject to Irish law in relation to its activities in Ireland. The parent company remains liable for the debts and obligations of the external company. 

An external company must register with the CRO within 30 days after establishing its branch or place of business in Ireland.

Some of the benefits of an external company are:

• It can operate in Ireland without having to incorporate a new company in Ireland, which saves time and money.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives in Ireland.

Some of the drawbacks of an external company are:

• It has to comply with various legal and regulatory obligations, such as registering with the CRO, filing annual returns, financial statements, and tax returns.
• It has to disclose certain information to the public, such as its parent company’s name, registered office address, and financial performance.
• It may be subject to double taxation on its profits, depending on the tax treaty between Ireland and its parent company’s country of incorporation.

Joint Venture Company

A joint venture company is a type of company that is formed by two or more parties for a specific purpose or project. It is a separate legal entity that can own assets, enter into contracts, and sue or be sued in its own name. The parties of a joint venture company share the profits, losses, risks, and liabilities of the joint venture. 

A joint venture company can have one or more shareholders, but there is no maximum limit. A joint venture company must have at least two directors and a company secretary, who can be one of the directors or a separate person.

Some of the benefits of a joint venture company are:

• It can leverage the expertise, resources, and networks of each party to achieve a common goal or benefit from a market opportunity.
• It can benefit from the 12.5% corporate tax rate on trading profits and access various tax reliefs and incentives in Ireland.
• It can terminate or dissolve the joint venture when the purpose or project is completed or no longer viable.

Some of the drawbacks of a joint venture company are:

• It has to comply with various legal and regulatory obligations, such as filing annual returns, financial statements, and tax returns.
• It has to disclose certain information to the public, such as its directors’ names, registered office address, and share capital.
• It may face conflicts or disputes among the parties over the management, control, or performance of the joint venture.

Partnership

A partnership is a type of business arrangement that is not a separate legal entity but is formed by two or more persons who carry on a business in common with a view to making a profit. The partners of a partnership share the profits, losses, risks, and liabilities of the partnership. 

A partnership can have two or more partners, but there is no maximum limit. A partnership does not have any directors or company secretary, but it must have at least one partner who is resident in Ireland.

Some of the benefits of a partnership are:

• It is easy and inexpensive to set up and operate, as it does not require any registration or filing with the CRO.
• It has flexibility and autonomy in managing its affairs, as it does not have to follow any statutory rules or regulations.
• It can benefit from various tax advantages, such as being taxed at the individual partner’s rate and deducting business expenses from taxable income.

Some of the drawbacks of a partnership are:

• It has unlimited liability for its partners, who are jointly and severally liable for the debts and obligations of the partnership.
• It has to disclose certain information to the public, such as its partners’ names and business address.
• It may face difficulties in raising capital, transferring ownership, or resolving conflicts among the partners.

Sole Trader

A sole trader is a type of business arrangement that is not a separate legal entity but is carried on by one person who owns and controls all aspects of the business. The sole trader is responsible for all the profits, losses, risks, and liabilities of the business. 

A sole trader does not have any shareholders, directors, or company secretary. A sole trader must register with the Revenue Commissioners as a self-employed person.

Some of the benefits of a sole trader are:

• It is easy and inexpensive to set up and operate, as it does not require any registration or filing with the CRO.
• It has flexibility and autonomy in managing its affairs, as it does not have to follow any statutory rules or regulations.
• It can benefit from various tax advantages, such as being taxed at the individual’s rate and deducting business expenses from taxable income.

Some of the drawbacks of a sole trader are:

• It has unlimited liability for its debts and obligations, which means that the sole trader’s personal assets are at risk if the business fails.
• It has to disclose certain information to the public, such as its name and business address.
• It may face difficulties in raising capital, expanding the business, or transferring ownership.

Choosing the Right Company Type for Your Business

As you can see, there are many Irish company types you can choose from when starting a business in Ireland. Each type has its own features, advantages, and disadvantages that you need to consider carefully before making your decision. Some of the factors you should take into account are:

• The nature and purpose of your business
• The number and identity of your co-founders or partners
• The amount and source of capital you need
• The level of liability you are willing to accept
• The tax implications and benefits you can avail of
• The legal and regulatory obligations you have to comply with
• The future plans and goals you have for your business

To help you choose the right company type for your business, you can consult with a professional adviser, such as an accountant, a solicitor, or a company formation agent. They can provide you with expert guidance and advice on the best option for your specific situation and needs.

The Incorporation Process in Ireland

If you decide to incorporate a company in Ireland, you will have to follow a certain process to register your company with the CRO. The process may vary depending on the type of company you choose, but the general steps are:

• Choose a unique and suitable name for your company and check its availability on the CRO website.
• Prepare the required documents for your company, such as the constitution, the memorandum and articles of association, the form A1, and the form B1.
• Submit the documents and the fees to the CRO online or by post. The fees may vary depending on the type of company and the method of submission.
• Wait for the CRO to examine and approve your documents. This may take from a few days to a few weeks, depending on the workload of the CRO and the quality of your documents.
• Receive your certificate of incorporation from the CRO, which confirms that your company is legally registered and can start operating.

Ongoing Compliance Requirements for Irish Companies

Once you have incorporated your company in Ireland, you will have to comply with various ongoing legal and regulatory requirements to maintain your company’s status and good standing. Some of the common requirements are:

• Filing annual returns and financial statements with the CRO within 28 days after the annual return date of your company. The annual return date is usually the anniversary of your company’s incorporation date.
• Filing tax returns and paying taxes to the Revenue Commissioners within the specified deadlines. The taxes may include corporation tax, income tax, value-added tax (VAT), payroll tax, capital gains tax, capital acquisitions tax, stamp duty, and local property tax.
• Keeping proper books and records of your company’s transactions and affairs. The books and records must be kept at your company’s registered office or another place notified to the CRO.
• Holding regular meetings of your company’s directors and shareholders. The meetings must be recorded in minutes and kept in a minute book.
• Notifying the CRO of any changes in your company’s details, such as its name, address, directors, secretary, share capital, constitution, or objects.
• Complying with any other relevant laws and regulations that apply to your company’s industry or sector, such as health and safety, data protection, consumer protection, environmental protection, or anti-money laundering.

What Are The Benefits of Different Irish Company Types?

To summarise, here are some of the main benefits of each type of Irish company:

• LTD: Simple and flexible constitution, limited liability for shareholders, audit exemption possibility, 12.5% corporate tax rate.
• CLG: Limited liability for members, charitable status possibility, tax exemptions and reliefs for charities.
• DAC: Specific objects or activities, limited liability for shareholders, audit exemption possibility, 12.5% corporate tax rate.
• PLC: Access to public capital markets, limited liability for shareholders, 12.5% corporate tax rate, enhanced reputation and visibility.
• Unlimited: No filing of financial statements with CRO, no compliance with certain provisions of Companies Act 2014, 12.5% corporate tax rate.
• SE: Cross-border operation within EU under single set of rules, limited liability for shareholders, 12.5% corporate tax rate, choice of management structure.
• External: Operation in Ireland without incorporation in Ireland , 12.5% corporate tax rate, reduced administrative costs and legal complexity.

• Joint venture: Shared expertise, resources, and networks, limited liability for shareholders, 12.5% corporate tax rate, easy termination or dissolution of joint venture.
• Partnership: Easy and inexpensive to set up and operate, flexibility and autonomy in management, tax advantages for partners.
• Sole trader: Easy and inexpensive to set up and operate, flexibility and autonomy in management, tax advantages for sole traders.

Frequently Asked Questions

What is the most common Irish company type?

The most common type of company in Ireland is a Private Limited Company by Shares (LTD).

What type of company is LTD in Ireland?

An LTD company in Ireland is a Private Limited Company by Shares. It has limited liability and has a share capital. The maximum number of members is 149.

What is the Irish version of an LLC?

The Irish equivalent of an LLC (Limited Liability Company) is a Private Company Limited by Shares (LTD).

What is the difference between LTD and DAC?

An LTD company in Ireland can have one director, does not need to hold an AGM, and can undertake any activity. A DAC company must have at least two directors, must hold an AGM where it has 2 or more members, and its activities are limited to its objects as set out in its memorandum of association.

What is the difference between PLC and Ltd?

A PLC (Public Limited Company) can sell and trade shares with the general public and can list their shares on a stock exchange. An LTD (Private Limited Company) can offer shares to stakeholders, but not to the general public. The personal finances of any shareholders of an LTD company are protected by limited liability.

What is a subsidiary company in Ireland?

A subsidiary company in Ireland is an independent legal entity that is either partially or wholly owned by another company. It has the same compliance requirements as a Limited Company in Ireland.

Get started with Peak Accounting Solutions today!

Understanding Irish company types is the first step. Bringing your business vision to life requires expert guidance. At Peak Accounting Solutions, we specialise in Irish company formation, ensuring a smooth, compliant setup for your venture. Don’t navigate the complexities alone – let our expertise guide you.

Ready to establish your business in Ireland? Hire Peak Accounting Solutions today for comprehensive company formation services!