Irish law provides for a range of business forms for investors. These include:
A company can be incorporated in Ireland as one of four forms:
- Private Company Limited by Shares
- Designated Activity Company
- Public Limited Company
- Unlimited Company
- Single Member Company
The Companies Act 2014 was effective 1 June 2015, replacing the Companies Acts 1963-2013. This new Act restates the previous law, although several areas are streamlined in regard to governance, legal capacity and mergers. A significant change is the introduction of two new company forms: the Private Company Limited by Shares (LTD) and the Designated Activity Company (DAC). These two forms replace the Private Limited Company. The LTD is a more simplified form, and the DAC is similar to the Private Limited Company under the old law. Private Limited Companies need to re-register as either an LTD or a DAC within an 18-month transition period ending 30 November 2016.
- An LTD may have a single director
- An annual general meeting if two or more members is not required
- An LTD has a single document constitution with no objects clause
- An LTD has limited liability and has a share capital
- Its name must end in “Limited” or “Teoranta”
- A DAC must have at least two directors
- A DAC must have an annual general meeting if there are two or more members
- A constitution must contain a memorandum and articles of association
- A DAC has limited liability and has a share capital or is a private company limited by guarantee with a share capital
- A DAC's name must end in “Designated Activity Company” or “Cuideachta Ghníomhaíochta Ainmnithe”
Public limited companies are less common and used primarily in cases where there are a larger number of shareholders or when shares are list on a stock exchange. They share many similarities with private limited companies, except for the following key differences:
- There are no limitations on transfer of shares
- There is no maximum limit on number of shareholders, but the minimum is seven
- Shares can be issued to the public and listed on a stock exchange
- Minimum issued share capital of EUR 38,092, of which 25% must be paid up
- Increased reporting obligations
- The name of a public limited company must include the letters “plc”
Unlimited companies are rarely used in Ireland as the liability of members is not restricted in regard to debts of the company. The advantages of unlimited companies are generally lower reporting requirements and flexibility in returning share capital.
A single member company is a company which is incorporated with one member, or whose membership is reduced to one person. However, the company must have at least two directors and a secretary (unless it is a LTD company, which can also be a single director company). The sole member, if he/she so decides, can dispense with the holding of General Meetings, including Annual General Meetings (AGMs). The financial statements and reports that would normally be laid before the AGM of a company still need to be prepared and forwarded to the member. All company types can be single member companies.
An office established by a foreign company in Ireland which performs operations ancillary or incidental to the company’s business is generally regarded as a place of business. Under the 2014 Act, place of business registrations are no longer required or permitted.
No provision was made in the legislation for these types of registrations by foreign companies. The opportunity does exist to register as a Branch where the Place of Business is that of a foreign limited liability company and meets the branch registration criteria. There is no option to register with the CRO, however, where the Place of Business is that of a foreign unlimited liability company. In either scenario, these companies may, however, continue to exist and trade.
Any company which is incorporated outside of Ireland and establishes a branch in Ireland must be registered with the CRO under the Companies Act 2014. The registration must take place within one month of the establishment of the branch in the State
Branches are not specifically defined by law, but are generally considered to be an office established by a foreign company which has the appearance of permanency, has its own management, and is able to negotiate business with third parties without involving the parent company. Branches are not treated as separate legal entities from their parent company.
Ireland allows for partnerships to be formed as either general partnerships (GP) or limited partnerships (LP).Under Irish law, a partnership is defined as the relationship that exists between two or more persons carrying on business with a view to profit. Partners in a partnership can be individual persons or corporate entities, or both.
Irish partnerships are unincorporated and are not treated as separate legal entities. In GPs, all partners will have unlimited liability. In LPs, there must be at least one general partner with unlimited liability, while the limited partners are only liable to the extent of the cash or property they contribute to the partnership.
In general, partnerships are not required to maintain or file accounts. Note, however, that In the case of limited partnerships, if a general partner is a limited company, the partnership must file accounts for public record with the Companies Registration Office (CRO).
Partnerships are legally formalized and governed by a written partnership agreement. If a formal agreement does not exist, a general partnership is governed by the provisions of the Partnership Act of 1890, and a limited partnership is governed by the Limited Partnership Act 1907.
Sole traders in Ireland are unincorporated businesses of a single individual conducting business. They are the simplest form of business to establish and have minimal formalities to establish.