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Limited Liability Company

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Private Limited Companies are the most common types of businesses that are set up in Ireland.

Private Limited Companies may have between 2 and 50 members (shareholders). There is no minimum capitalisation requirement.

A Shareholder's liability is limited to the amount of share capital contributed by them. The Shareholder's right to transfer shares is restricted and invitations to the public to subscribe for shares or debentures of the company are prohibited.

In order to do so it is necessary to file with the Companies Registration Office the following documents:

  • A copy of the memorandum and articles of association signed by the initial shareholder(s);
  • A statutory form (Form A1) signed by the initial shareholder(s), the initial directors and the initial secretary;
  • The prescribed incorporation fee (currently €60 for a private company limited by shares);
  • A bond of €25,395 (where there is not at least one Irish resident director).

The Advantages of a Limited Liability company over a sole trader or partnership are:

  • Limited liability status
  • Separate legal identity to individual members
  • The only income taxable on the owners of the business is any salaries or dividends taken from the business
  • Scope for tax planning.

The Disadvantages of a Limited Liability company include:

  • The cost of Company formation together with expenses
  • The general requirement for an annual audit (not required for companies limited by shares where turnover is under €317,000, the balance sheet total is under €1.9 million and there are less than 50 employees)
  • The public filing of sometimes sensitive commercial financial information with the Companies Registration Office.
  • The need for accounts to comply with Companies Acts together with auditing and accounting standards
  • Business losses may not be set against personal income
  • Possibility of further taxation on capital gains if appreciating assets are withdrawn from the business at a later date.

For further information, please contact Malcomson Law by calling 01 874 4422 or by filling out an Online Enquiry Form.