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Company FAQ

What is a limited company?

The shares in a company are owned by its shareholders. If the company is a limited liability company, the shareholders' liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is regarded as a separate legal entity and, therefore, is separate and distinct from those who run it. The company (and not the individual shareholders) is the appropriate person to be sued in the event that debts are incurred by the company which remain unpaid despite demand.

There are four types of limited companies:

A private limited company limited by shares:
The members' liability, if the company is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is 50.

A company limited by guarantee not having a share capital:
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, in the event it is wound up, not exceeding a specified amount and subject to a minimum of 1. If a guarantee company does not have a share capital, the members are not required to buy any shares in the company. Many charitable and professional bodies find this form of company to be a suitable vehicle as they wish to secure the benefits of separate legal personality and of limited liability but do not require to raise funds from the members.

A company limited by guarantee having a share capital:
As this is a private company, the maximum number of members is 50. 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 than 1.

A public limited company:
This company type must have a minimum of seven members. Their liability is limited to the amount, if any, unpaid on shares held by them. It should be noted that it is unlawful to issue any form of prospectus except in compliance with the Companies Acts 1963-2005

What is a single-member company?

A single-member company is a private company limited by shares or a guarantee company having a share capital, 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. For further information on a single-member company, see Information Leaflet No. 12, "Single-Member Company".

What are the characteristics of a limited company?

  • Unlike a sole trader or partnership, the company has a separate legal existence. This means that it is the company itself which owns property and that it is the company which may sue and be sued in respect of the business of the company.
  • The company continues to trade irrespective of director or management changes until the company is wound up.
  • There is limited liability. This means that, should the company fail, the shareholders' liability is limited to the amount of share capital contributed by them (i.e. the price of the shares held by them). The personal assets of directors/shareholders cannot be seized to pay off company debts.

What is an unlimited company?

In an unlimited company, there is no limit on the liability of the members. Recourse may be had by creditors to the shareholders in respect of liabilities that may be owed by the company which the company had failed to discharge. Such company must have a minimum of two shareholders if it is a private company and a minumum of seven if it is a public company.

What is a registered office address?

It is the address of a company to which CRO correspondence and all formal legal notices addressed to the company will be sent. The registered office can be anywhere in the State. The address must be a physical location, not just a post office box number, because people have the right to visit the company's registered office to inspect certain registers and documents and to deliver documents by hand.

It is vital a company keeps the CRO informed of the location of its registered office address. A company notifies its change of address by sending a completed Form B2 within 14 days of the date of the change. The form may be filed free of charge by completing the web version on www.cro.ie.

What is the minimum number of officers required by a company?

All company types must have one secretary and a minimum of two directors, one of whom is required to be an Irish-resident (see 3.5 below). The secretary may be one of the directors of the company. A body corporate may act as secretary to another company, but not to itself.

Is there any exemption from the requirement to have a resident director?

At least one of the directors is required to be resident in the Republic of Ireland. However, this requirement does not apply to any company which holds a bond, in the prescribed form (see Appendix 1), in force to the value of 25,394.76. The bond provides that, in the event of a failure by the company to pay the whole or part of a fine imposed in respect of an offence under the Companies Acts 1963-2005 or the Taxes Consolidation Act 1997, or a penalty under the latter legislation, an amount of money up to the value of the bond will be paid by the surety in discharge of the company's liability.

Can anyone be a company director?

In general terms, yes. Formal qualifications are not required. However, certain persons may not become directors:

  • a body corporate
  • an undischarged bankrupt
  • an auditor of the company
  • as specified by the articles of association e.g. if a director fails to attend board meetings without reasonable excuse for a specified period of time, or he/she becomes of unsound mind
  • a person disqualified as a director by the High Court under section 160 Companies Act 1990 is debarred from becoming a director for the period specified in the court order
  • a person who has been convicted on indictment of any indictable offence in relation to a company, or any indictable offence involving fraud or dishonesty, is automatically disqualified for five years (or for such period as the court may order) from being appointed as a director or from being concerned in any way in the promotion, management or formation of any company

Must the company carry on an activity in the State?

A company will not be incorporated unless it appears to the Registrar of Companies that the company, when registered, will carry on an activity in the Republic of Ireland. "Activity" means "any activity that a company may be lawfully formed to carry on and includes the holding, acquisition or disposal of property of whatsoever kind".

Can I choose any name I want for my company?

No, there are restrictions on your choice of company name. The CRO may have to refuse a name if:

  • it is identical to or too similar to a name already appearing on the register of companies
  • it is offensive
  • it would suggest state sponsorship

The following guidelines will assist you in assessing the acceptability or otherwise of company names:

  • It is generally recommended that company names include extra words so as to create a sufficient distinction between names. Certain words and their abbreviations together with accents and punctuation marks are not sufficient to distinguish between company names. Examples of such words include the definite article and the words "company", "co", "corporation", "and", "&", "service", "services" ,"limited", etc. Place names are not considered to be a sufficient distinction between company names, e.g Ireland, Dublin, West, etc.
  • Similar descriptive elements, e.g. press/printing, staff/employment agency, or the inclusion of only a general or weak qualification such as "holding", "group", "system", "services", "international", etc. may not be regarded as a sufficient distinction between company names.
  • Particular care should be taken with names considered to have a distinctive element i.e. names consisting primarily of made-up words or non-dictionary words. The inclusion of qualifying words may not be sufficient to create a distinction between company names.
  • Names which are phonetically and/or visually similar will be refused. This includes names where there is a slight variation in the spelling and the variation does not make a significant difference between the names.
  • A number on its own will not be accepted as a sufficient distinguishing mark, unless the company concerned is part of the same group.
  • The use of a year in numerals to differenciate between two companies of otherwise the same name is prohibited.

The following restrictions also apply to company names:

  • Names containing certain words cannot be used unless approved by relevant bodies. For example, the words "bank", "banc", "banking", "banker" may only be used with the permission of the Central Bank of Ireland. This also applies to names such as "hollybank", "sweetbank", "canal bank", "bancorp", etc. and the surname "Banks", not withstanding the fact that the company being incorporated may not intend to carry on banking business.
  • Words such as "insurance", "re-insurance" and "assurance" cannot be used unless prior permission has been sought from and granted by the Irish Financial Services Regulatory Authority (IFSRA).
  • The word "society", "co-op" or "co-operative" cannot be used unless permission has been sought from and granted by the Registrar of Friendly Societies.
  • The words "University" and "Institute of Technology" or "Regional Technical College" cannot be used unless permission has been sought from and granted by the Department of Education.
  • In the case of the word "Charity", further information may be sought by the CRO to support the application.
  • If a name includes words which imply specific functions, e.g. "holding", "group", etc., further information may be required by the CRO to support the application.
  • The use of the word "standard" is prohibited.
  • The use of the word "Credit Union" is prohibited under the Credit Union Act 1997.

You are advised not to incur expenses relating to the proposed name (e.g. preparing signs, headed notepaper, stationery, etc.) in advance of receipt of the certificate of incorporation that will confirm that the company has been registered with the chosen name.

 

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