Types of Companies in Ireland
There any many different types of companies in Ireland available to any prospective entrepreneur. The main types are a Private Company Limited by Shares (Ltd), a Company Limited by Guarantee (CLG) and a Designated Activity Company (DAC). Lesser used company forms are an Unlimited Company (UL) and Public Limited Company (PLC).
Below we discuss the types of companies in Ireland.
Private Company Limited by Shares (Ltd)
Introduced in the Companies Act 2014 a private company limited by shares replaced the previous Limited Liability Company. It’s by far the most used company type for commercial arrangements and private affairs. It has a simple form Constitution that set out the company’s governing rules. A member’s liability is limited to the amount, if any, that is outstanding on the share they hold in the company.
The company is a separate legal entity which means, is separate and distinct from its owners. Therefore, only the actual company can be sued for its obligations and can sue to enforce its rights.
A Ltd can only have one director. The Ltd also needs a secretary and cannot be the same person as the director in the event there is only one director. It must have a minimum of one shareholder and a maximum of 149 shareholders or members. They can avail of filling abridged audited accounts, showing a limited amount of information at the Companies Registration Office (CRO), depending on the size of the company.
There is an option available of an Audit Exemption provided the criteria for audit exemption are met. However, it is still necessary to file an Annual Return every year with the CRO. An Ltd can pass both special and ordinary written resolutions. An Ltd can get rid of the requirement for holding an Annual General Meeting (AGM) if all members entitled to attend and vote to pass a unanimous written resolution that acknowledges receipt of the financial statements, resolves all such matters that would have been resolved at the AGM while confirming that there is no change in the appointment of the auditors (if there has been one appointed). Lastly, the name of the company must end in “Limited (Ltd)” or “Teoranta (Teo)”.
Company Limited by Guarantee (CLG)
A CLG company does not have a share capital and can have a minimum of one member. The liability for each member is limited to the amount they have undertaken to contribute to the company, should it be wound up, not surpassing the amount specified in the memorandum. Members are not required to buy any share in the company as a CLG does not have a share capital.
A CLG is often used by charities, sports and social clubs, societies, trade associations, residential management companies and non-profit organisations. The company name must end with unless they have an exemption, “Company Limited by Guarantee (CLG)” or “Cuideachta faoi Theorainn Rathaiochta (CTR)”. A CLG’s activities are limited to the objects set out in its memorandum of association.
A CLG does have a Constitution which includes a Memorandum and Articles of Association. A CLG must have at a minimum two directors and can also apply for audit exemption and a dormant company audit exemption, provided the criteria for audit exemption are met.
Designated Activity Company (DAC)
Under the Companies Act 2014, a new form of company called the DAC was formed. There are two types; a private company limited by shares and a private company limited by guarantee having a share capital.
Like above, a DAC has a Constitution document that includes a memorandum and articles of association. Its activities are limited to a specific purpose as set out in its memorandum of association and it must have at least 2 directors. Also, a DAC cannot dispense with the requirements to hold an AGM unless it has only one member/shareholder. Furthermore, a DAC can pass both ordinary and special majority written resolutions.
Similar to the Ltd above, it can file and acquire audit exemption and dormant company audit exemption provided the criteria are met. The company name must in with “Designated Activity Company (DAC)” or “Cuideachta Ghníomhaíochta Ainmnither (CGA)” unless exempted. It’s worth noting that Private limited companies that are trading as credit institutions or insurance undertakings are required to register as DACs.
A DAC has limited liability and has a share capital or is a private company limited by guarantee with a share capital.
Public Limited Company
When a company’s intention is to be listed on a stock exchange to offer its share to the general public, a PLC is set up. A PLC can have an unlimited number of members/shareholders but must have at least one. Their liability is limited to the amount, if any, unpaid on shares held in their name.
A PLC will have a Constitution document in which contains a memorandum and articles of association. A PLC is not eligible for audit exemption or dormant company audit exemption.
Two directors at a minimum are needed for a PLC and a PLC cannot dispense with the holding of an AGM. It must have a minimum issued shared capital of €25,000, at least 25% of which must be fully paid up before the company commences business. The company name must end with “Public Limited Company (PLC)” or “Cuideachta Phoiblí Teoranta (CPT)”.
An Unlimited Company can be either Private or Public. A public unlimited company may have a share capital (PUC) or have no share capital (PULC). A private unlimited company however must have a share capital (ULC).
Like a PLC, an Unlimited Company has a Constitution which includes a Memorandum and Articles of Association. It has unlimited liability and must have a minimum of two directors. Similar to the types of companies above, the company must end in “Unlimited Company (UC)” or “Cuideachta Neamhtheoranta (CN)”. Public unlimited companies cannot claim eligibility for audit exemption or dormant company audit exemption.
It should be noted that every company, (other than an LTD), must have at least two directors and a secretary, who may be one of the directors. Furthermore, there is a requirement to have at least one director resident in a member state of the European Economic Area or have a surety bond to the value of €25,000. Neither is needed if the Irish Registrar of Companies issues a certificate that the company has a real and continuous link with one or more economic activities in Ireland.
The formation of a company requires a Constitution. It consists, in all cases other than an LTD, of a memorandum of association. This sets out the company’s objectives and the articles of association that regulates the manner in which the affairs of the company are to be conducted.
Looking to establish a company in Ireland?
City Trust is the leading provider of company formation services in Ireland. If you’re looking at establishing or avialing of these types of companies in Ireland please contact us today at email@example.com or call us on +353 1 6753140.