Ireland presents many benefits to businesses that wish to incorporate in Ireland. It provides a gateway to the lucrative EU market, the opportunity to avail of Ireland's highly educated and skilled workforce, and various programmes to support new enterprises in Ireland.Ireland has one of Europe's most attractive tax regimes, with corporation tax from only 12.5%, and the possibility for companies involved in technology to benefit from significantly reduced corporation tax through Ireland's R&D tax credit incentive.
When considering incorporation in Ireland, it is important to learn about the various types of legal entities for conducting business.
Companies Limited by Shares
The private company limited by shares — also known as the LTD company — is the most common form of company in Ireland. The LTD has a simple constitution without an objects clause and must have at least one director and a company secretary. It is possible for the LTD company to dispense with its AGM and an authorised share capital. Certain company activities such as a credit institution or insurance undertaking cannot incorporate as an LTD company.
The Designated Activity Company limited by shares – also known as a DAC– is similar to the LTD company in many ways. However, it must have a memorandum of association with an objects clause; it must have an authorised share capital; it has to have at least 2 directors and only single-member companies can dispense with the AGM.
Public Limited Company – also known as a PLC– is a public company which can offer shares to the public. Similar to the DAC, it must have a memorandum of association with an objects clause; it must have an authorised share capital; it has to have at least 2 directors and only single-member companies can dispense with the AGM. However, the nominal value of the company's allotted share capital must not be less than €25,000 with a minimum of 25% paid up before it can commence business.
As limited liability companies, the shareholders' legal responsibility for the debts of the LTD, DAC and PLC is limited to the amount paid or to be paid up for their shares.
Companies Limited by Guarantee
The Company Limited by Guarantee – also known as the CLG – is commonly utilised by charities and clubs as it does not have a share capital. The members of the company are legally liable for the amount which they have guaranteed they will contribute if the company is wound up.
The Designated Activity Company Limited by Guarantee does have a share capital. The members of this type of company are legally liable for the amount paid or to be paid up for their shares and also the amount they guaranteed they will contribute if the company is wound up
There are 3 types of unlimited company – PUC, PULC and ULC. The members of this type of company have unlimited liability for the debts of the company. This entity is useful for occupations that cannot operate through limited liability companies. In certain circumstances, an unlimited company may not have to submit its financial statements to the Companies Registration Office and this makes the company type attractive to persons that wish to keep their financials private from the general public.
There are several common features for all of the above company types, for example, every company must have at least one EEA resident director unless a Section 137 bond is held. All of the above company types must prepare annual financial statements. However, subject to satisfying certain conditions, an audit exemption is available to all except the PLC, PULC and PUC. The guarantee companies and unlimited companies are similar to the DAC in that they must have a memorandum of association with an objects clause; an authorised share capital; at least 2 directors and may only dispense with the AGM if they are single-member companies.
Other types of corporate structures
Corporate Structures are not only limited to the above company types in Ireland. A non-exhaustive list of other non-company types include Limited Partnerships, General Partnerships, European Economic Interest Groupings (EEIG), Societas Europaea (SE) and Branches.
Partnerships are ideal for certain kinds of professionals that are forbidden from commercial activities, such as doctors and lawyers. Whereas the branch permits a foreign company to have a presence in Ireland without setting up a separate Irish company. The EEIG and SE are EU vehicles which are useful for some EU cross border activities.
This is merely a sample of some of the most well-known corporate structures available to businesses and investors establishing themselves in Ireland.
Pearse Trust has the expertise to help you navigate the structures available and create the type of legal entity best suited to your ownership preferences as you look to expand into the attractive marketplace that Ireland has to offer.