The Road To Incorporating Your Company in Ireland - A 20-step checklist

When you’re starting a business, you need to consider what kind of structure you want to be. In Ireland, the most common types are Sole Trader and Limited Company.

We have compiled a checklist of personal requirements, business activities and actionable tasks you need to do in order to become a Limited Company in Ireland.

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.

Personal requirements

☐1. Determine your company type.

The Companies Registration Office (CRO) outlines the different company types in Ireland. A Private Company Limited by Shares (Limited/LTD Company) is a common type of structure in Ireland. If you wish to be a type other than a Limited Company, there are other steps involved. This checklist is a guideline of the necessary steps it takes to be a Limited Company in Ireland. Be aware that there may be other steps depending on your situation. The main features of a Limited Company are that it has limited liability and has a share capital, it can have a single director and it can claim eligibility for audit exemption.

Other types of companies include Designated Activity Company (DAC), Companies Limited By Guarantee (CLG), Public Limited Companies (PLC), and Unlimited Companies.

☐2. Be aware that you need to prove that your business is centrally managed in Ireland to qualify for 12.5% Corporation Tax.

You need to prove that your Limited Company is being centrally managed in Ireland when qualifying 12.5% Corporation Tax (CT), otherwise CT is paid at 25%. You can generally prove that a business in being run in Ireland when these are true:

  • All or most of the company’s directors live in Ireland
  • You have an office or head office in Ireland
  • The company holds board of directors meetings in Ireland
  • Financial accounts and records are kept in Ireland
  • Your employees live in Ireland
  • You have invoices that you are trading with Irish customers
  • You have records of flights into Ireland, if you’re a foreign director

☐3. Be aware that you need to be a resident of The European Economic Area (EEA) or if you’re a non-resident of the EEA, you need to have at least one of the following:

  • At least one company director who is resident in a member state of the EEA
  • A non-resident bond. The bond insures that a company with a non-resident director meets all its statutory regulations. It insures the company for €25,000 against certain breaches of the Companies Acts and Taxes Acts for a period of 2 years. However, it does not cover all late filing penalties, such as penalty fee for late submission of company’s annual return to the Companies Registration Office (CRO). The CRO states that if the bond is granted, “that company will be exempted from the requirement to have at least one EEA resident director from the date of the certificate, as long as the certificate remains in force”. The Directors and Company Secretary are responsible for putting the bond in place.
  • A statement from the Revenue Commissioners confirming that the company has a real and continuous link with one of more economic activities being carried out in the State. Generally, this statement is acquired once a company has already been established for many years and has previously either had a non-EEA resident director and provided a bond during this time, or had an EEA resident director who is no longer with the company.

☐4. Be aware that your personal assets are generally protected against the debts of the business.

Limited Companies in Ireland have limited liability which means that unless you have been seen as trading recklessly or you have signed a personal guarantee with the bank, your personal assets cannot be taken. If there was a claim made against the business, only the company’s assets, such as property or equipment can be seized.

As a Limited Company, you have limited liability.
As a Limited Company, you have limited liability.

Business Requirements

☐5. You need to have at least one director.

A director is generally responsible for managing the limited company on behalf of its shareholders (which can be the same people in small companies) and must adhere to the legal responsibilities. You need to have at least one EEA resident director or you have a non-resident bond with a statement from the Revenue Commissioners.

☐6. You need to have a company secretary.

If you only have one director, you need a separate company secretary. If you have more than one director, one of these directors can also be the company secretary. CRO states that “a body corporate may act as secretary to a company”. This means you can outsource your company secretary to a corporate body, such as Accountant Online.

☐7. You need to have at least one shareholder.

You divide ownership through the number of shares issued. Having shareholders means that there is clear division of ownership.

☐8. You need to know how many authorised and issued shares you want to release.

Authorised shares are the full amount of shares that the limited company can use if required. Issued shares are the number of shares that have actually been allocated and paid for by shareholders.

We recommend issuing 100 shares of €1 in value and having 10,000 authorised shares. This means that if you want to issue more shares later, there are more available. For example, if you only had 100 authorised shares and you had 100 issued shares, you wouldn’t have enough shares to give to a new director.

☐9. You need to have a registered office.

A registered office is the official address of your company and it must be a physical address located in Ireland. Most of your official correspondence from CRO will be sent to this address and it is also where your statutory registers and records are kept.

This information is accessible to the public so if you’re running your company from your home address, you may wish to keep it private. The CRO states “it is possible to have the registered office placed in the care of an authorised agent”, such as Accountant Online.

☐10. You need to have a Constitution of company.

The Constitution allows you to trade in any legal business you desire and you are required to have it when you register your company with the CRO. CRO states that “Constitution” under the Companies Act 2014 replaces the term – “Memorandum and Articles of Association”. A Constitution is a formal document that sets out the rules of a company and describes exactly the relationship between the company, shareholders, director and other officers of the company.

You also need to have a NACE code which describes the activities of your business. You can outsource this to a company formation specialist, such as Accountant Online. All you have to do is outline the specific activities of your business and Accountant Online can do the rest.

☐11. You need to have a company seal.

Every Limited Company in Ireland is required to have a company seal. It must have the company’s name engraved on it and it 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.

☐12. You need register your company with the Companies Registration Office (CRO) (form A1).

In a form A1, you must give details of the company name, its registered office, details of secretary and directors, their consent to acting as such, the subscribers and details of their shares.

You can also incorporate your company online via Companies Online Registration Environment (CORE). You are then given a CRO number which you need to register for tax.

☐13. You need to register your limited company for Corporation Tax (CT).

To register for CT, you need to have the CRO number. You need to pay CT if you’re an Irish company or a company that is incorporated in Ireland. To qualify for 12.5% CT, you need to prove that you’re actively trading and centrally managed in Ireland (check step 1). Even if you don’t qualify for 12.5% CT, you still need to register with Revenue for tax and you are subject to CT at 25%.

You can register for CT via a tax agent, such as Accountant Online. Revenue states that ‘an agent can advise you and submit returns on your behalf. An agent will also have access to your Revenue Online Services (ROS) account.’ You need to tell Revenue if you are using a tax agent and you need to sign an Agent link notification. Your agent will send the Agent link notification to your Revenue office and this form allows Revenue to link your tax record to your agent. By doing this, you are allowing your agent act on your behalf. The Agent link notification includes your Tax Reference Number and your tax agents’ Tax Advisor Identification Number (TAIN). Your tax agent can fill this in for you. You get your Tax Reference Number when you register for tax.

If you don’t plan on using a tax agent, you need to fill out a Form TR2 for Irish resident companies or a Form TR2 (FT) for foreign companies. Once you have registered your company, you must file all payments and returns (annual return, CT return, director returns etc) online through The Revenue Online Service (ROS).

☐14. You need to register your company for Value Added Tax (VAT); if applicable.

Over the period of 12 months, if your business generates a turnover over €75,000 from the sale of goods or over €37,500 for the sale of services, you will need to register for VAT. This is a rolling 12 months, not annual. This means that you can register for VAT at any time that you estimate your business will supply goods or services over the threshold.

Revenue state that you or a tax agent, such as Accountant Online, can register your business for VAT. Once you register for VAT, you will get a VAT number and you can reclaim the VAT on your expenses. You must also charge VAT on your sales and you must prepare and submit VAT returns.

If you’re supplying goods/services to other EU countries, you need to check the VAT thresholds and rules for that specific country.

☐15. You need to register your company 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 the meat processing.

Revenue specifies that ‘you are not a principal contractor if the only construction work that you are involved in is on buildings or land for your own use or the use of your employees.’ Keep in mind that if you incorrectly register a contract of employment as a relevant contract for RCT, you will have to pay PAYE, PRSI and USC that you should have deducted and you may also have to pay interest or penalties. You register for RCT when you register for tax  and your tax agent will fill out the required details.

☐16. You need to register your company 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.

☐17. You need to file all payments and returns with CRO and be aware of 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, no later than 28 days from your statutory ARD. Each company has an ARD 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.

The first B1 form includes details of the tax registration number, registered office address, authorised and issued share capital, members, their shareholding and any share transfers in the preceding year, directors and their details and the company secretary. You can outsource this to a company secretarial service, such as Accountant Online.

Your second B1 form is submitted 18 months from incorporation. You generally need to include a copy of the balance sheet, profit and loss account, directors’ report and auditor’s report. Some small to medium-sized companies are exempt from these requirements as defined by the Companies Act 2014 – be sure to check with an Accountant.

Subsequent B1 forms are then filed every year. For example, Ann O’Brien incorporated her limited company on 1st January 2017. Her first B1 is due 31st June 2017. Her second B1 is due 31st December 2018. Generally, all B1’s thereafter are due on the 31st December each 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. This could incur significant costs to your business.

☐18. You need to 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 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.

☐19. You need to register your unique company name with the CRO.

You are required to register your unique company name with the CRO when you incorporate your company. Once you’re set up as a Limited Company, you have created a separate legal entity. This means that if someone made a claim, they would make it against your business and not your personally.

Your company name is registered with the CRO and no one else can use it. Keep in mind, a company name isn’t the same as trademark. You can register your business name online with CRO for a fee of €20. After your registered name is accepted, you will be issued a certificate via email. You can also reserve a company name for up to 28 days via CRO’s online service, CORE.

Keep in mind that 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 Accountant Online. Company name registration is included in our new company formation package.

☐20. You generally need to have Original Certificate of Incorporation, your company Constitution. and copy of form A1 to set up a company bank account in Ireland.

When you’re setting up a limited company, it’s best practice to keep your business income separate from your personal income. Your form A1 is your company registration form.

Still having the Sole Trader or Limited Company debate?

Here at Accountant Online, we specialise in helping startups set up their business smoothly. For further help during your process, get in touch with us at hello@accountantonline.ie or join our free live webinar 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 minimising 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 or send an email tohello@accountantonline.ie