Starting your own business is an exciting step, and one of the most popular structures for entrepreneurs in Ireland is the private company limited by shares (LTD). In this guide, we will explain what a limited company is, outline its key benefits, and walk you through the process of setting one up.
What is a Limited Company?
A limited company is a separate legal entity from its owners (known as members or shareholders). This structure allows the company to:
- Own assets
- Sign contracts
- Incur debts
- Take legal action
- Be held liable independently of its owners
In the case of an LTD (Private Company Limited by Shares), members’ liability for company debts is limited to the unpaid amount on their shares. For example, if a member agrees to pay €50 for their shares and has paid it, they are not personally liable for company debts beyond that amount.
Benefits of a Limited Company
Forming a limited company offers several key advantages:
- Limited Liability: Your personal assets are protected, meaning you’re only financially responsible for the amount invested in the company.
- Tax Efficiency: Corporation tax in Ireland is 12.5% on trading income, which is often lower than personal income tax.
- Separate Legal Entity: The company can own assets, enter into contracts, and be sued in its own name, offering legal protection to its owners.
- Ownership Flexibility: You can divide ownership through shares and attract investors more easily.
- Continuity: The company continues to exist even if the shareholders or directors change.
How to Set up A Limited Company
1. Choose A Company Name
- Must be unique and not too similar to existing names
- Check availability on the CRO website
- Name must end with “Limited” or “Teoranta” (in Irish)
2. Appoint Directors and a Company Secretary
- Directors: At least one, aged 18 or older. At least one must be a resident in the EEA (European Economic Area), unless you arrange a section 137 bond.
- Company Secretary: Responsible for ensuring compliance with company law. In a single-director company, a different person must act as a secretary.
3. Register an Irish Business Address
You must have a physical address in Ireland for official correspondence. This address can be your office, home, or a virtual office service.
4. Prepare a Company Constitution
This legal document outlines your company’s rules. An Ltd. company typically uses a single-document constitution.
- The company’s name, purpose, and structure
- Share capital and member liability
- Rules for internal management
LTDs use a single-document constitution, typically simpler than other company types.
5. Register with the Companies Registration Office (CRO)
Submit Form A1 and your Constitution through the Core System. You’ll need to provide:
- Company name and address
- Directors’ and secretary’s details
- Shareholders and share capital information
Once approved ( typically within 5-10 working days), you’ll receive a Certificate of Incorporation.
6. Register your Tax with Revenue
After incorporation, you must register with the Revenue Commissioners for:
- Corporation Tax (mandatory)
- VAT ( if applicable)
- PAYE/PRSI (if hiring employees or paying directors)
7. Open a Business Bank Account
To open a business bank account in the company’s name, you’ll usually need:
- Certificate of Incorporation
- Company Constitution
- CRO Company Printout
- Proof of ID and address of directors
8. Keep Proper Records and File Annual Returns
As a limited company, you are required to:
- Keep accurate financial records
- Prepare annual financial statements
- Maintain statutory registers (directors, members, etc.)
- File an Annual Return (Form B1) and financials with the CRO
Final Thoughts
Setting up a limited company in Ireland is an innovative, tax-efficient way to run a business. While the process involves several steps and legal obligations, the benefits of limited liability, tax savings, and a professional structure make it worthwhile.
If you’re unsure where to start, we at Nexiō can help you with every step — from preparing your constitution to registering with the CRO and Revenue. Your success is our success, and we’re here to make the process simple, compliant, and stress-free.
Ready to start your business journey?
Contact us today — and let’s build your future, one company at a time.
