Legal Company Structures in Ireland.
The three legal company structures are sole trader, partnership and limited company. The type of structure chosen depends on the kind of business you want to run, with whom you will be doing business and your attitude to risk.
Sole Trader (registered by an individual)
Setting up a sole trader company is easy but if the business fails, personal assets could be used to pay creditors. The main legal obligation is to register as a self-employed person with the Revenue Commissioners.
Partnership (registered by two or more people)
A partnership company is where two or more people agree to run a business together. The partnership agreement has to be drawn up by a solicitor. The partners are jointly responsible for running the business and if it fails all partners are jointly responsible for the debt.
Corporate (registered by a limited company)
The characteristics of a Limited Company in Ireland.
The Limited Company has a separate legal existence. This means that the company itself owns property and that the company may sue and be sued in respect of the business of the company.
In this type of company the liability is limited. If the company fails, the shareholders’ liability is limited to the amount of share capital contributed by them to the company. The personal assets of directors and/or shareholders cannot be seized to pay off company debts.
The four most common types of limited companies to be incorporated are:
Private Company Limited by Shares : multi member or single member company.
The member’s liability is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 99.
The Company Limited by shares must have an auditor, and accounts must be filed each year with the Companies Registration Office. Small companies can prepare abbreviated accounts which do not have to include the level of turnover.
Irish companies need at least one resident director, or must deposit an insurance bond with the Registrar.
Company Limited by Guarantee and not having a Share Capital.
Companies limited by guarantee are normally used only for charitable or non-profit-making purposes.
As this is a public company, there must be a minimum of seven members. The members’ liability is limited to the amount they have undertaken to contribute to the assets of the company.
Company Limited by Guarantee having a Share Capital.
The maximum number of members in this type of company is 99. The members have liability under two headings; firstly, the amount, if any, that is unpaid on the shares they hold, and secondly, the amount they have undertaken to contribute to the assets of the company, in the event that it is wound up, being not less that 1€.
Public Limited Company.
In this type of company, members’ liability is limited to the amount, if any, unpaid on shares held by them. This company must have a minimum of seven members.
We can help you choose the right company type for you, see the Company Formation section for more information.
If you have any queries, please do not hesitate to phone us on 01-6797920/21.
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