Do you want to set up a Limited Company in Ireland but don’t know what’s involved? Do you need to know what steps to take before you commit to setting up?
This essential checklist for setting up a Limited Company in Ireland will guide you through the requirements of company formation. We’ll show you what legal obligations you have to be aware of before setting up a company and how we can help you through this process.
If you rather not go through the process on your own, talk to our Client Services Team about outsourcing company formation. We’re here to help.
Firstly, what is a Limited Company?
- A Limited Company (LTD) is sometimes called ‘A Private Company Limited by Shares’.
- It’s one of the most common types of business structure in Ireland.
- A Limited Company benefits from limited liability which means directors/shareholders are generally only liable for the amount they have invested in the business.
- Companies in Ireland are separate legal entities, which means they can take out loans, enter contracts and be sued.
- Companies have more compliance requirements than a Sole Trader so, if you are changing from Sole Trader to Limited Company, or setting up for the first time, you should be aware of your legal obligations.
What do you need to set up a company in Ireland?
This essential checklist guides you through the process of setting up a company in Ireland. Some of these steps may differ depending on your specific circumstance, so please talk to our Client Services Team if you need more advice.
1. Have at least one director
The first thing you need to do is to appoint a director – you need at least one.
The director is responsible for managing the company on behalf of its shareholders. In small companies, the directors and shareholders are often the same people.
All Irish companies are required to have at least one director who is a resident of an EEA country. If all the directors of your company are based outside of the EEA, then you must purchase a non-EEA residents bond before setting up your company. This also applies to UK-resident directors – check out the director rules after Brexit here.
You can set up a company without purchasing a bond if there one at least one director who lives in an EEA-state, like Ireland. On the other hand, if there two directors and they both live in a non-EEA country, for example, the USA, then you have to purchase a bond before setting up a Limited Company in Ireland.
2. Choose a company secretary
If you only have one director, you need to find a separate company secretary. If you have two or more directors, one of them can also act as the company secretary.
You can outsource your company secretary to a corporate body, such as our professional team here in Accountant Online. This option is popular if you don’t have anyone to act in this professional capacity.
The main duty of the company secretary is to file Annual Returns each year. They work with your accountant to ensure that your financial statements are filed on time. Late filings will incur fines up to €1,200 and your financial statements may need to be audited for two years. For peace of mind that your Annual Returns won’t be missed, find out more about our company secretarial service.
3. Have at least one shareholder
The shareholders are the owners of your company. It is very common in new businesses for the director and/or company secretary to be the shareholders of the company.
If you are setting up a company with a co-founder, you may have questions about shareholders agreements and voting rights but it’s good to note that these are not required when setting up a company here. Speaking to a professional will help you.
Feel free to talk to us if you would like more information about setting up an Irish Limited Company.
4. Decide how many shares you want to release
Think of shares as pieces of the company you can give away. Therefore, this division of shares determines the legal ownership of the company. You issue shares when you’re setting up a Limited Company and you can also issue more or transfer shares once the company has been set up.
You can also have different types of shares with different voting rights but this is usually done after the company is set up. To do this, it requires more work than an average company set up as it is more complicated.
Talk to us if you have any questions about setting up a company – we’re happy to help
Types of shares required when setting up a company
- Authorised shares. These are like an aspirational amount of shares that you can issue, now or in the future. Authorised shares have no monetary value and do not affect the value of the company.
- Issued shares. These are the number of shares that have actually been allocated and paid for by shareholders. If you issue 100 shares to one shareholder then that shareholder will have 100% ownership of the company. The number of shares that you issue determines who owns the Irish Limited Company.
We recommend having 100,000 authorised shares and issuing 100 shares of €1 in value. But don’t worry if you’re not sure about the share structure. We have a team of Company Secretarial professionals who help you each step of the way.
5. Have a registered office address and business address
- The registered office address is the official, legal address of your company. It must be a physical address located in Ireland and monitored regularly. It is common for this address to be with your Accountant because important notices get sent here. Our registered office address service ensures your company complies with these laws.
- The business address is where your company’s business mail, such as invoices, are sent. This is different from a trading address. For instance, you may not want to show your home address if you’re running an online business or working from home. In this case, you can avail of a business correspondence address for your company. Please note that Revenue will still need to know where exactly your business trades from for tax purposes.
Check out our Virtual Office service where you get both address services at a discounted price.
6. Decide on a company name
When you start thinking about setting up a Limited Company in Ireland, the company name is probably the first thing you think about. However, it’s important to know that the Companies Registration Office (CRO) can be quite strict with company names.
The company name must be unique, distinguishable against other names already registered in Ireland and follow guidelines. The Registrar will carry out name checks and if your proposed name isn’t different enough, your company submission will be returned.
If you are feeling uninspired about what name to choose, check out our top tips for choosing your company name.
It is easier and less time consuming to outsource company registration to a company formation specialist, such as our team here in Accountant Online. Company name check is included in our new Company Registration package, so just tell us your proposed company name and we will do the rest!
7. Prepare and sign the incorporation documents
Once you have met the requirements above, you are now ready to incorporate your company. There are 3 options:
- Set up a company online via Companies Online Registration Environment (CORE).
- Complete a paper application (form A1).
- Outsource to a company formation specialist such as Accountant Online.
Although option 1 and 3 are prepared online, it’s important to note that you need to print the online application and sign it with wet ink. All directors, company secretary and shareholders need to physically sign the paperwork and return it to the CRO.
It’s important to be aware that this process is changing from the 16th of December 2020 as the CRO is launching a digital transformation. This new system will make CRO filings easier, quicker to process and turnaround.
Outsourcing to a specialist is easy because we are familiar with the whole process so we can guide each step of the way.
8. Order your company seal
So, now that your company is incorporated, you will need to purchase a company seal.
It must have the company’s name engraved on it and used to seal certain documents. Examples include the transfers of shares and certain documents provided in the articles, company law, contract law, and property law.
9. Set up a business bank account in Ireland
To open a business bank account in Ireland, one director usually needs to have at least one face-to-face meeting with a bank representative. Alternatively, you can set up an online bank.
Before you set up a company bank account, you need the company documents – including the original certificate of incorporation, your company constitution and a copy of the A1 form. This means you can’t set up a bank account until the company is incorporated.
10. Register for tax
New companies in Ireland need to complete tax registration before you start trading. This means before you invoice your clients, you need to be registered for tax with Revenue.
It is a separate process to registering your company with the CRO and this process is usually done by an accountant.
Talk to us about our Startup Offer for new companies – it includes tax applications and perfect for new companies in Ireland.
All companies in Ireland need to pay Corporation Tax, no matter how large or small. To qualify for 12.5% Corporation Tax, you need to ensure you can prove that you’re actively trading and centrally managed in Ireland.
Even if you don’t qualify for 12.5% Corporation Tax, you still need to register with Revenue for tax and you are subject to Corporation Tax at 25%.
Value Added Tax (VAT)
There are certain criteria your company must meet before it can get VAT registered in Ireland. One criterion is that if your business generates a turnover above €75,000 from the sale of goods or above €37,500 from the sale of services, you will need to register for VAT. Talk to your accountant about VAT as registration can depend on your specific circumstance.
Relevant Contracts Tax (RCT)
You need to pay RCT if you are a principal contractor. This is someone who pays a subcontractor to carry out activities on behalf of your business.
This applies to subcontractors in these ‘relevant’ industries: construction, forestry, and meat processing.
If you plan to employ people, you will have to register as an employer and operate a payroll system in Ireland.
Employers are responsible for deducting the appropriate PAYE tax, USC, and PRSI from your employee’s wages on or before they are paid. You can outsource this task if you are inexperienced with payroll.
11. File the beneficial owner with the Register Of Beneficial Owners (RBO)
All Irish registered companies are required to register their beneficial owner (anyone holding 25% or more of company shares) on the RBO website. You have 5 months after incorporation to complete this registration.
Majority owners need to have a Personal Public Service Number (PPSN) to complete the registration. Alternatively, a form BEN2 needs to be completed and uploaded to the RBO website.
If you don’t complete the RBO registration, it is considered a criminal offence and this can result in the imposition of a fine or even conviction.
12. File Annual Returns with the CRO
When you incorporate your company, you need to file Annual Returns with the CRO, even if you are not trading. Each company has an Annual Return Date allocated to it. It can be checked using the CRO Company Search facility.
Your first Annual Return (a B1 form) is due 6 months after incorporation. It is important to note that you have 28 days from your ARD to file your Annual Return online and then a further 28 days to ensure the form is submitted to the CRO. Your accountant and Company Secretary will advise you on this. The filing procedure will be changing from the 16th December, so it’s important that you’re aware of your new obligations.
Do you have questions about your compliance requirements for new companies in Ireland? Our team of Client Services members is happy to talk you through the deadlines for new companies.
Be aware of the late filing deadlines
If you are late filing your first B1 form, your company will be fined €100 and then €3 per day after that. This penalty is up to a max €1200 per year. If you are late filing any subsequent B1 forms, you will have to pay the fine and your accounts will be audited for 2 years.
These deadlines are important and it may be worthwhile to have a professional look after it for you. Talk to our Client Services Team about your compliance needs and we can recommend the best services for you. We’re here to help.
13. File a Director’s income tax return (Form 11) before 31st October
Proprietary directors are obliged to file a self-assessed directors’ tax return (Form 11) before the 31st October every year. Your first directors’ return is due the year following your company’s incorporation. For example, if your company was set up in January 2020, the first director’s return will be due by 31st October 2021.
This return must be made even if the director only has employer (PAYE) income or the company hasn’t traded at all.
Ready to set up a new Limited Company in Ireland?
If you’ve gotten this far in our checklist and you still have questions, get in touch with us. We’re here to help.
Setting up an Irish Limited Company needn’t be a difficult task. With the right support and resources, your business can be set up within a few weeks. Our team of professionals are here to help you each step of the way.
Call us on +353 (1) 905 9364 or email firstname.lastname@example.org.
We’re also available via Whatsapp +353 89 442 8091 and live chat online.