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The Ultimate Guide to Setting Up a Private Company Limited by Shares (LTD) in Ireland

Blog on Setting up a private company limited by shares in Ireland

Congratulations on taking the first step towards your entrepreneurial journey in Ireland! Choosing a Private Company Limited by Shares (LTD) is a popular option for businesses due to the limited liability protection it offers to its owners, known as shareholders. This blog post will guide you through the process of setting up a Private Company Limited by Shares (LTD) in Ireland.

What is a Private Company Limited by Shares (LTD)?

A Private Company Limited by Shares (LTD) is the most common type of business structure in Ireland. Here’s a breakdown of what it means:

  • Private: An LTD company is privately owned, meaning its shares are not publicly traded on a stock exchange. Shareholders are usually a small group of individuals or other companies.
  • Limited by Shares: Shareholders are the owners of an LTD company. Their financial liability is limited to the amount they invested in their shares. This means that if the company faces debts or lawsuits, the shareholders’ personal assets are protected.
  • Separate Legal Entity: An LTD is considered a distinct legal person. It can enter into its own contracts, own property, sue, and be sued – all independently from its owners.

Key Features of an LTD

  • Ownership: LTDs can have one or more shareholders.
  • Management: At least one director is required to manage the day-to-day operations of the company.
  • Limited Liability: Protects shareholders’ personal assets.
  • Financial Reporting: LTDs must file annual returns and financial statements with the Companies Registration Office (CRO).

Benefits of Forming an LTD in Ireland

  • Limited Liability Protection: Shareholders’ liability is limited to the amount unpaid on the shares they hold.
  • Separate Legal Entity: An Irish limited company is a separate legal entity from its shareholders. The company may sue or be sued in its own name.
  • Credibility and Trust: An LTD structure can enhance your company’s credibility and attract investors.
  • Tax Advantages: Ireland offers a competitive corporate tax rate.

Steps Involved in Setting Up a Private Company Limited by Shares (LTD) in Ireland

    1. Choose a Unique Company Name:
      • Conduct a company name search with the Companies Registration Office (CRO) to ensure your desired name is too similar. Your company name must end with the word “Limited” or the Irish equivalent. We can check the availability of a name via the Companies Registration Office.  If the name is available we can reserve it for 28 days.
      • Consider a name that reflects your brand and resonates with your target audience while ensuring it’s available.
    2. Appoint Directors and Shareholders:
      • At least one director, who must be an EEA resident, is required to manage the company. Directors are responsible for managing the company and complying with company law.
      • An Irish company must have at least one shareholder. A single-member company is entirely possible. Shareholders are the owners of the company.
    3. Prepare the Company Constitution:
      • This document outlines the internal rules and regulations of your Irish company, including shareholder rights and voting procedures. The Companies Act 2014 sets out the key elements that must be included in the constitution.
      • We will provide the Company Constitution which can submitted to the Companies Registration Office.
    4. Register Your Company with the CRO:
      • File the necessary forms and fees with the CRO to register a private limited company. This process can only be done online.
      • You will receive a Certificate of Incorporation upon successful registration.
    5. Open a Business Bank Account:
      • Choose a reputable bank in Ireland and open a business bank account for your Irish limited company.
      • This account will be used for all your company’s financial transactions.
    6. Register for Taxes:
      • You must register your limited company with the Revenue Commissioners for tax purposes.
      • This will involve obtaining a Tax Registration Number (TRN).
      • Depending on your business activity, you may be required to register for Value Added Tax (VAT).
    7. Comply with Ongoing Legal Requirements:
      • Private limited companies in Ireland are required to file annual returns and financial statements with the CRO.
      • Directors are also responsible for maintaining statutory registers and holding an annual general meetings.

Things to Note:

  • Director Residency: At least one director of an Irish LTD must be a resident of the European Economic Area (EEA). If the company does not have an EEA Resident Director then a “Non-Resident Directors Bond” will be required to be put in place. 
  • Audit Exemption: Many small LTDs may qualify for audit exemption, reducing administrative burdens.

Is an LTD Right for You?

The LTD business model is a popular choice for entrepreneurs in Ireland due to its flexibility, limited liability, and tax advantages. If you are looking for a well-established structure with a proven track record, forming an LTD could be the right move for your business venture in Ireland.

Setting Up Your LTD in Ireland: Partner with Crowley Corporate Services

If you’ve decided that forming a Private Company Limited by Shares (LTD) in Ireland is the right path for your business, let the experts at Crowley Corporate Service guide you through the process. Our specialised team understands the intricacies of setting up LTDs in Ireland and can ensure a seamless and efficient incorporation.

We streamline the formation process, from choosing your company name and drafting your constitution to handling all filings with the Companies Registration Office. With our expertise, you’ll have peace of mind knowing your LTD is established correctly, allowing you to focus on growing your business.

If you’re ready to take the first step in establishing your LTD in Ireland, or if you’d like more information about our services, don’t hesitate to get in touch with Crowley Corporate Service. We’re committed to helping your business thrive in Ireland.

Frequently Asked Questions:

What is the minimum number of directors for an LTD in Ireland?

An LTD in Ireland must have at least one director. However, if the company has only one director, it must also appoint a separate individual as the company secretary. If the company has more than one director, one of the directors can also serve as the company secretary.

How is an LTD taxed in Ireland?

An LTD in Ireland is subject to corporation tax on its profits, with the standard rate being 12.5%, one of the lowest in Europe. This rate applies to trading income, while non-trading income, such as investment income, is taxed at a higher rate. Additionally, an LTD must handle other taxes such as Value Added Tax (VAT), Pay As You Earn (PAYE) for employees, and relevant business rates.

What are the annual filing requirements for an LTD?

Each year, an LTD must file an annual return with the Companies Registration Office (CRO) along with its financial statements. These documents must be filed within 28 days after the company’s Annual Return Date (ARD) and failing to do so can result in penalties and loss of audit exemption.

Can an LTD have shareholders outside of Ireland?

Yes, an LTD in Ireland can have shareholders from any country. There are no restrictions on the nationality or residency of shareholders, which makes it a flexible option for international business people looking to establish a base in Ireland or the European Union.

What are the benefits of being an LTD over a sole trader?

Operating as an LTD offers several advantages over being a sole trader, including limited liability protection, which safeguards personal assets from business debts. Additionally, LTDs often enjoy a more professional image, which can be beneficial for business relations. They also have potential tax advantages, particularly in terms of reinvestment and tax planning opportunities. Lastly, raising capital may be easier for LTDs since they can issue shares to investors.

Disclaimer: Specific advice should be obtained in relation your company / query as the above advice is general in form.  All our blogs are provided for educational and practical purposes and should not be treated as professional / legal advice. For any specific queries you may have please contact our office.

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