When you start a Limited Company in Ireland you need to guarantee you meet all the legal requirements. Our checklist will help you avoid easy mistakes.
Better still, save yourself the hassle and the paperwork – ask us to do it for you. We’ll have your new business up and running in a matter of days, freeing you up to make it a success. We’ll do it once and we’ll do it right!
A Limited Company structure helps you benefit from lower tax rates and more protection from business liabilities. The other main option is to operate as a Sole Trader. We’ll take you through the pros and cons of both set-ups.
This is a general outline of the main steps it takes to set up as a Limited Company in Ireland. Keep in mind that some steps will vary depending on your personal situation. If you’d like to skip these steps and go right ahead and purchase your new company online, we can set this up for you within a few days.
Starter Checklist For Limited Companies In Ireland
1. Understand What A Limited Company Is
A Limited Company (LTD) is sometimes called ‘A Private Company Limited by Shares’. It is the most common type of structure in Ireland. A Limited Company has limited liability and share capital. It can have a single director and it can claim eligibility for audit exemption.
2. Have A Director That Is Resident In The European Economic Area (EEA) OR Have At Least One Of The Following:
- A Non-Resident Bond. This insures the company for €25,000 against certain breaches of the Companies Acts and Taxes Acts for a period of 2 years. A non-resident bond allows the company to be exempted from the requirement to have at least one EEA resident director. We can draw up your Bond application forms for you – see our full company formation package. The Bond needs to be renewed every 2 years until an EEA resident director is appointed or the company can prove a real and continuous link with trade in Ireland.
- Get a Statement From The Revenue Commissioners confirming that the company has a real and continuous link with one or more economic activities being carried out in the state. Usually, you need to be established in Ireland for a few years already – your accountant can help you with this.
3. Have At Least One Director
Name a director – you need at least one. The director is responsible for managing the Limited Company on behalf of its shareholders. In small companies the directors and shareholders are often the same people.
4. Designate A Company Secretary
If you only have one director, you need to find a separate company secretary. If you have two or more, 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.
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, check out our company secretary service.
5. Decide How Many Shares You Want To Release
Think of shares as pieces of the company you can distribute which determine the legal ownership of the company. You issue shares when you’re setting up a Limited Company. There are two types to consider.
‘Authorised shares’ are like an aspirational amount of shares that you can issue, now or in the future. ‘Issued shares’ are the number of shares that have actually been allocated and paid for by shareholders.
We recommend having 100,000 authorised shares and issuing 100 shares of €1 in value.
Here’s an example of two basic share structures. Issuing 100 shares to one shareholder gives them 100% ownership of the company. Issuing 100 shares and splitting them 50/50 between two shareholders gives them 50% ownership each of the company. The authorised shares have no monetary value and do not affect the value of the company.
6. Have At Least One Shareholder
The shareholders are the owners of your company. It is very common in startups for the company director and/or company secretary to be the shareholders of the company.
7. Set Up A Registered Office Address And Business Address
Both of these addresses are required when registering a company with the CRO. The Registered Office Address is the official address of your company. It must be a physical address located in Ireland and monitored regularly.
A business address is where your company is actually trading. If you’re running an online business or working from home, you may want to look into a Virtual Office service provider to cater to your address needs.
8. Decide On A Company Name
When you want to set up a Limited Company, the company name is probably the first thing you think of. But did you know that your company name must be unique and distinguishable against other names already registered with the CRO? The Registrar will carry out name checks and if your proposed name isn’t strong, your company submission will be returned. We do this all the time and have lots of experience to help you make the right choice.
If you are feeling uninspired about what name to choose, check out our top tips for choosing your company name. Your proposed name must meet company name guidelines. You can check if anyone else has used your proposed name via the CRO’s Company Search Facility or search the trademark register.
It is often easier and less time consuming to outsource company formation to a company formation specialist, such as our team here in Accountant Online. Company name check is included in our new company formation package, so just tell us your proposed company name and we will do the rest!
9. Prepare And Sign The Incorporation Documents
Once you have met the requirements above, you are now ready to incorporate your company. You can incorporate your company online via Companies Online Registration Environment (CORE) or have a company formation specialist such as Accountant Online to do this for you. Setting up a Limited Company with Accountant Online is simple.
Gather up all your details as above to be able to complete the form. Our company formation service includes company name check, a fast-tracked service with the CRO, a fully comprehensive Constitution, and all the necessary paperwork will be sent directly to your email.
All you need to do is sign the forms (Form A1 and Constitution) and post them back to our Dublin office. We can have your company formed in less than one week.
10. Order Your Company Seal
So your company is now incorporated and your company name has been approved. You will now need to purchase a company seal. It must have the company’s name engraved on it and should be used to seal certain documents. Examples of such documents include the transfers of shares and certain documents provided in the articles, company law, contract law and property law.
Purchase your company seal at the same time you register your company and you’ll have it as soon as it’s set up.
11. Set Up A Company Bank Account In Ireland
Once your company is set up, it’s best practice to keep business income separate from personal income. To open a bank account in Ireland you usually need to have at least one meeting face-to-face. You will also need company documents – including the original certificate of incorporation, your company constitution and a copy of the A1 form – which Accountant Online draws up for you when you form your company with us.
12. Register For Corporation Tax
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 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%.
You can register for CT via a tax agent, such as Accountant Online. As part of our Startup Offer for accountancy services, we also offer tax registration services. The great thing about this offer is that you have a Chartered Accountant to help you on your road to success.
Once your company is registered with the CRO and Revenue, you or your accountant must file all payments and returns (annual return, CT return, director returns etc) online through the Revenue Online Service (ROS). Your agent (i.e your accountant) can advise you and submit returns on your behalf. Your accountant will also have access to your ROS account.
13. Register For Value Added Tax (VAT); If Applicable
Over the period of 12 months, 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. This is a rolling 12 months, not annual. That means that you can register for VAT at any time you estimate your business sales may exceed the threshold.
You can register your company for VAT through Accountant Online or another tax agent. Once your company is registered, you will receive a VAT number which allows you to reclaim the VAT on your business expenses. VAT must also be charged on your sales and you must prepare and submit VAT returns. Not sure what VAT to charge? Check out Revenue’s VAT database which has a list of all industries.
In our Startup Offer for accountancy services, we offer VAT returns. Find out more about our offer for new Limited Companies.
14. Register For Relevant Contracts Tax (RCT); If Applicable
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.
15. Register For Employers PAYE And File Employers Returns; If Applicable
If you plan to employ people, you will have to register as an employer and operate a payroll. You are responsible for deducting the appropriate PAYE tax, USC, and PRSI from your employee’s wages. You also need to file regular returns (P30 and P35) throughout the year. Employees will also need the appropriate payslip, P60, and P40, as required. This can be a time-consuming task and you may consider outsourcing payroll to a corporate body, such as Accountant Online.
Your accountant will advise you on the types of taxes you need to pay. Accountant Online’s Startup Offer for newly Limited Companies includes payroll up to 5 employees. If you’re ready to set up as a Limited Company, check out our Startup Offer.
16. File Annual Returns With The CRO And Know Your Statutory Annual Return Date (ARD)
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 and it can be checked using the CRO Company Search facility.
Your first annual return (a B1 form) is due 6 months after incorporation. However, it is important to note that you have 28 days from your ARD to file your annual return. Your accountant and company secretary will advise you on this. The first annual Return includes details about your company. You can outsource this to a company secretarial service, such as Accountant Online. We also offer this as part of our Startup Offer for new Limited Companies.
Your second annual return is due 12 months later. Your accountant will now need to prepare a balance sheet, profit and loss account, directors’ report and sometimes, an auditor’s report every year. Subsequent annual returns and financial statements are then filed every year.
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. Your annual returns are looked after for you as part of our company secretary service and Startup Offer but please note that you may need an accountant to look after your financial statements.
17. File a Director’s Income Tax Return (form 11) Before 31st October
A company director is obliged to file a self-assessed income tax return every year, in the same way that a sole trader is self-assessed. A non-proprietary director (someone who owns less than 15% of the shares in the company) must submit a form 12 tax return. As a client of Accountant Online, we can also file your Director’s Return.
If you’re ready to set up your new Limited Company in Ireland, check our website for information on our prices for company formation service.
Here at Accountant Online, we specialise in helping startups set up their business smoothly and stress-free. For further help during your process, get in touch with Kelly at firstname.lastname@example.org or join our free live webinar for startups.