What is a Limited Liability Company ?
A Limited Liability Company (LLC) is often referred to as a Private Company Limited by Shares (LTD). It’s a very popular business structure for small and medium-sized businesses due to its flexibility.
Governed by the Companies Act 2014, here’s a breakdown of what you need to know :
Characteristics of an Irish Limited Liability Company
- Separate legal entity : An Limited Liability Company is a distinct legal entity from its owners. So it means that It can enter contracts, own assets, sue, and be sued in its own name
- Share capital : The company issues shares to its shareholders, who own a portion of the company. There is no minimum-authorized share capital required to launch such company in ireland and they can be one or more share holders
- Limited liability : Shareholders’ personal assets are protected, as their liability is limited to the amount unpaid on their shares. This ensures that personal assets remain safe in case the company faces financial difficulties or legal issues.
- Management : A Limited Liability Company must have at least one director and one company secretary, they cannot be the same person if the company only has one director.
- Taxation : LLCs in Ireland benefit from a low corporate tax rate of 12.5%, which is one of the lowest in Europe
Differences between Limited Liability Company and other company types
Not every company type is suitable for every business. Even though Limited Liability Company is the most common, regarding your size, your industry, and the amount of security you want, you should choose wisely.
Here’s a quick comparative table on the different company structure :
| Company Type | Liability | Legal Entity | Tax Treatment | Administrative Difficulty | Suitable for |
| Limited Liability Company (LLC) | Limited | Separate | Corporation tax (12.5%) | Moderate | Small to medium-sized businesses |
| Designated Activity (DAC) | Limited | Separate | Corporation tax (12.5%) | Moderate but more than LLC | Specific projects or joint ventures |
| Public Limited Company (PLC) | Limited | Separate | Corporation tax (12.5%) | High | Large businesses |
| Company Limited by Guarantee (CLG) | Limited | Separate | Tax-exempt (if non-profit) | Moderate | Charities, clubs, non-profits |
| Sole Trader | Unlimited | No | Personal Income tax (up to 52%) | Low | Individuals running small businesses |
| Partnership | Can be Limited or Unlimited | No | Personal Income tax (up to 52%) | Low | Small group of individuals |
How to set up a Limited Liability Company in Ireland ?
To set up a LLC in Ireland you must follow these few steps :
1. Choose a company name
You have to pick a unique name and check with the Company Resgitration Office (CRO) to ensure it is not already taken. It also must end with “Limited” or “Ltd”.
2. Appoint a director and a secretary
As previously said, a director and a secretary must be appointed. If the LLC only has one director, the secretary must be a different person. Although there are a few exceptions, at least one of the directors must be a resident of the European Economic Area (EEA)
3. Obtain a registered office (physical address)
To receive all of your official correspondence, you must have a registered physical address in Ireland for your company. It cannot be just a post box because you must be able to receive certain documents by hand.
4. Prepare the constitution
This document outlines the company’s governance structure and operating rules. It is composed by the Memorandum of Association (basically the company’s objectives and share structure) and by the Articles of Association (the internal rules and governance).
5. Register to the CRO
The Companies Registration Office (CRO) is the main Irish administration who will acknowledge your existence as a Limited Liability Company. To register there you must send your constitution, complete the form A1 (which indicates your company name, directors/secretary details, shareholders, share capital, registered office address, ect…) and pay your fees (50€ online + penality if you miss the deadline)
6. Register for taxes
There is 3 authorities you must register for taxes. The main one is the Corporation Tax. Its amount is one of the lowest in Europe at a 12.5% rate per year. Next, there is the Payroll Taxes (PAYE) if you are employing staff. Finally, there is the Value Added Tax (VAT) on your goods or services if your turnover reachs a certain threshold.
7. Open a business bank account
In resonance with the separate legal entity and the limited liability that LLC’s companies offer, it is best for you to open a separate bank account. Mixing your business purchases with personal purchases will get messy very fast. if you’re unsure which bank to choose, check out our article about the Top 7 best irish bank accounts.
If you don’t want to lose time with all of this procedure, we, at Irish Company, can handle it for you. Enjoy our affordable package and get your company set up in Ireland in 3-5 working days
To conclude
So ! Now you know why Limited Liability Company is the most common and popular company structure in Ireland. It offers security and flexibility for any small to medium-sized businesses. You don’t pay a lot in taxes and it’s relatively easy to set up !
If you want to know more about irish company like Things to keep in mind when setting up an irish company or what are the Benefits of company registration in Ireland, take a look at our blog
