8 Things to Know Before Starting a Limited Company

Making list of limited company requirements
Make a list of the requirements for registering an Irish limited company. Image: Pixabay

Here we outline all of the preparation you need to set up a limited company in Ireland. This is an exciting time for you, but also a serious endeavor. Use these 8 things as a checklist for the paperwork you need to gather in advance of forming your company.

Limited Company Name Check

First, you need to do a company search on CRO to see if the name you want is already registered. There are quite a few rules around naming your company and sometimes the CRO search does not present all of the options, so we will conduct a free name check for you also. Like forming your company, finding the right company name is a big decision that requires thought which will help to build a strong brand identity. It is also important to check if the company name you are thinking of is already registered as a business name or a domain name as this might restrict how you can use the limited company name in future.

limited company

The Type of Work you Will be Doing

The form that you complete will ask you to explain what type of work you will be doing. Here you describe your business sector (e.g. manufacturing, tech, financial) and your business activity – the products or services you supply. Don’t worry about being tied to this exact description forever; this information is collected for statistical purposes and is called a NACE Code.

Registered Address of your Limited Company

Legally in Ireland, you need a registered office address when setting up a limited company. Here are 5 things you should know about this:

  • The Registered Address is where the Company Registration Office send the business’s legal notices
  • The registered office must be in the Republic of Ireland.
  • This address will be publicly available to anyone who looks you up in the Companies’ Registration Office.
  • If you don’t want to use your private address as your registered address, we offer a registered office service.
  • Your official registered company address does not have to be the same as your business address, (the place where you actually conduct your business).

Shares

This is where things get a little tricky but bear with us and we’ll get you there. Shares are basically units of ownership of a company. If you are setting up on your own with your own money, you might well own 100% of the shares. Normally, shares are valued at €1 each so 100 shares would give you Share Capital of €100.

man researching a limited company

What is the Difference Between Authorised Shares and Issued Shares?

Authorised shares

This refers to the number of Shares your Limited Company is authorised to issue to shareholders both right away and into the future – unless you apply to increase it later. You might only want to issue 100 shares to start but later on, you may want to issue shares to new shareholders. Be warned that authorising new shares is a much more complicated procedure when you are a fully formed company.

We recommend that you opt for 100,000 shares of €1 each. This will give you an Authorised Share Capital of €100,000 – the total value of your shares. If you were to issue all of the 100,000 shares this would be the total value of all the shares in the company.

Issued Shares

So now you are ‘authorised’ to issue 100,000 shares but you don’t have to ‘issue’ them to shareholders right away. The next question is – how many do you actually want to ‘issue’ now? We recommend that you issue 100 shares of €1 each – which gives you an Issued Share Capital of €100. You can divide this however you see fit e.g. 100% to you or 50% to you and 50% to a business partner or spouse.

Issued Share Capital is also the amount that you are actually liable for as a shareholder – this is what ‘limited liability’ means.  Please note, however, that company directors often have to underwrite bank or other company loans so may have extra liabilities in this way.

How Many Directors Does a Limited Company Need?

Startup limited company
Limited company directors

If you are forming a limited company in Ireland, you need a minimum of one director and one company secretary. That director must be a resident of the European Economic Area or if you are not a resident of the EEA, you can take out a non-resident bond that exempts you from this requirement.

Directors Details

You will need to supply the name, address, date of birth, occupation, and nationality of all of your directors. If you wish to draw a salary from your company, you need an Irish Social Security number (PPS number).

Shareholding

The issued share capital of the company can be divided in the way that suits you best but you will need to allocate all of the issued shares to a shareholder or shareholders. You can allocate all of the shares to one person and therefore that person will own 100% of the company.

Company Secretary Details

The Company Secretary needs to supply the name, address, date of birth, occupation, nationality and PPS number. The company secretary is not the same as an office secretary role. There are legal obligations a company secretary must fulfil, such as making annual financial returns and corresponding with legal and government revenue bodies. To keep all of these concerns off your desk as you begin your new limited company, it is good practice to ask a professional to act as your company secretary for peace of mind. 

Still Unsure About Jumping From Sole Trader To Limited Company?

Choosing to become a sole trader or limited company is a difficult decision to make. There are plenty of pros and cons linked to both business types and it does depend on your own personal circumstances. If you choose to form your company in Ireland, it is good to have the benefit of a good company secretary service so that you don’t have to worry about the compliance elements of filing, shareholding and submissions that are required. For your tax and compliance needs you will also need a good accounting firm to guide you along the way. We would be delighted to outline our services to you and discuss how we may help.

Online Company Formation Service

Once you have gathered all of the details listed above, you can purchase your new company online using our secure checkout service. We process your order on the same day and you will have your incorporation documentation within a week.

Special Offers for Startups

We specialise in startups and understand that usually you are working off strict budgets and bootstrapping your way to success, so we have partnered with a number of companies to offer you discounts on web design, workbench and printing services for startups registering their new company with Accountant Online. We also offer a discounted rate for accountancy services for startups.

Accountant Online is a firm of award winning Chartered Accountants serving Ireland and the UK. We understand how important it is for you to meet your compliance obligations, while minimizing your tax liability. We aim to save our clients money without compromising on the quality of our service.  Get in touch for a free consultation on 01 905 9364  or send an email to hello@accountantonline.ie. Find us on TwitterFacebook and LinkedIn.