Frequently Asked Questions

We have included many of the questions we are frequently asked regarding the requirements and advice when forming a company in Ireland. If your question isn’t listed here, please contact us and a member of our team will reach out to assist you.

Can I change from sole trader to limited company?

It is a relatively straightforward process to switch from a Sole Trader to a Limited Company:

  1. File a cessation of business name form with the CRO. 
  2. Choose a company name. You may wish to re-register the same business name you were previously trading as (subject to availability). 
  3. Chose the appropriate limited company type. A Private Company Limited by Shares (LTD) is the most popular company type for business ventures in Ireland.
  4. Once the limited company is registered, pick a date to cease operating as a sole trader and the following day, you can re-commence trading under the limited company.

Some key benefits of switching to a limited company are the ability to bring in investment via shareholders, limited liability, and generous Executive Pension allowances. The amount a Sole Trader can contribute to their pension is capped, however, Company Directors can contribute tax-free up to a limit of €2 million. 

Generally speaking, it would be beneficial for a sole trader business with a turnover exceeding €60,000 to convert to a Limited Company. However, this is a rough guide and it is advisable to seek professional advice from an Accountant, Solicitor, or a licenced Company Formation Agent.

Limited Company Package €295 | Company Formation Procedure

What are the benefits of a limited company over a sole trader?

There are three main benefits of Irish Limited Companies or LTDs:

  1. Limited Liability – Shareholders have limited liability meaning that they are only responsible for the outstanding amount (if any) on shares issued to them. Whereas, a Sole Trader has unlimited liability meaning they are liable for all business debts. This is because a sole trader is registered on the owner’s PPS number, but a limited company is a separate legal entity.
  2. Company Name Protection – A limited company name is protected from anyone else setting up the same or a similar name in Ireland. A Sole Trader can only register a business name, which is not protected.
  3. 12.5% Corporation Tax – Limited Companies can avail of Ireland’s low corporate tax rate, 12.5%. A Sole Trader must pay personal tax rates between 20% and 40%.

Please follow the attached link for our guidelines on whether to set up as a Sole Trader or Limited company

Sole Trader v LTD: What are the differences and why should I register as a limited company? 

Can I use my residential address for my Irish business?

Yes, a company’s registered office address can be a residential address. The requirement is that the address is a physical location and not a PO box. This information will be available on the public record so some people will choose to purchase a Registered Office Address Service or rent an office or Desk Space in a shared working environment.

What is a partnership business in Ireland?

A partnership is a relationship that exists between persons/corporate bodies carrying on a business in common with a view to making a profit. It is an unincorporated business organisation, of which there are two types in Ireland;

  1. The Limited Partnership (LP)
  2. The General Partnership (firm)

Read about the options for setting up a Partnership Business in Ireland.

Can a non-resident be the director of an Irish company?

Yes, non-residents can be the director of an Irish company. Irish companies are required to have at least one director who is a resident within the European Economic Area (EEA). However, if none of the directors meets this requirement the company must take out a Non-EEA Resident Director Bond.

How to choose an effective business name in Ireland

All company names must be approved by the CRO (Companies Registration Office in Ireland. To be accepted a company name must be unique and not deemed as too similar to any existing companies currently on the register. There are some restrictions to be aware of when choosing an effective company name that will gain CRO approval. For example; avoid terms such as “Solutions”, Enterprise”, and “Services” as these are considered non-distinguishing because they could be related to business in any industry. Try to use unique words and terms that are specifically related to the industry the company will be operating in to increase the likelihood of the company name being accepted by the CRO.

The full list can be viewed by following this link What are the company name restrictions in Ireland?

How to check if my company name is available in Ireland

The first step to setting up a Company (be it LTD, DAC, CLG, PLC etc.) is to check your chosen company name against those on the Register. The CRO (Companies Registration Office) in Ireland can be quite strict and can reject names that are too similar to existing company names.

Follow this link for a Free Company Name Check and our team will confirm if your company name will be accepted under the CROs requirements.

Can I register a company name that has been deregistered?

The rule in Ireland is that a company must be dissolved for more than 20 years before the name is available again.

However, if you had previously registered a business name as a Sole Trader the name may be available to be registered as a company name. Please click here for a Free Company Name Check and our team will confirm if the company name is still available.

How can I change a company name in Ireland?

There are multiple steps that need to be taken to successfully change an Irish company name.

  1. Check that the new name is available
  2. File G10 form with the CRO
  3. Amend the company’s constitution
  4. Prepare a special resolution – signed by company members
  5. Maintain meeting minutes
  6. Order a new company seal

The process is surprisingly complicated to do by yourself, Company Bureau can take care of everything for just €250+VAT Change an Irish Company Name

How do I write my own company constitution?

You can write your own company constitution, it is up to your discretion what items you’d like to include. Refer to our article What should my company have in its constitution? However, we strongly recommended that you use a licenced and experienced company formation agent and/or corporate service provider to ensure those items are in line with the Companies Act.

How I restore lost audit exemption for my Irish company?

If your company has missed its annual return filing deadline it will lose its audit exception for two years. Under Section 343 Companies Act 2014 an application can be made to the District Court to restore the lost audit exemption. Read more about how to file a District Court application.

Do dormant companies need to file accounts?

Yes, all Irish Limited companies (dormant or trading) must prepare and submit accounts to the Companies Registration Office on an annual basis, regardless of the company’s trading activities. More information can be found in our blog How to keep a Dormant Company Compliant.

Does a dormant company need to file an annual return?

Yes, all Irish Limited companies must prepare and file a B1 annual return to the Companies Registration Office on an annual basis, regardless of the company’s trading activities. More information can be found in our blog How to keep a Dormant Company Compliant.

Does a dormant company need an audit?

Most dormant companies will qualify for audit exemption when they file their annual returns on time. However, if they have filed their last return late, or the one before that, the company may have lost audit exemption. When a company loses audit exemption, it must engage an auditor to perform an audit on its finances and produce audited financial statements to be submitted with the annual return. An audit is required regardless of whether the company has traded or not.

More information can be found in our blog How to keep a Dormant Company Compliant.

How long can I keep a company dormant?

A dormant company is one that is not currently trading. In most cases, a company can be maintained in a dormant state as long as the filing and compliance requirements are met. More information can be found in our blog How to keep a Dormant Company Compliant.

Do companies need to hold annual general meetings (AGM)?

Irish companies are typically required to hold an AGM each year within the first 18 months of incorporation.

However, single-member companies (having only one shareholder) are not legally required to hold an AGM and Limited Companies, with more than one shareholder can pass a resolution to dispense with the holding of the AGM should they wish to not hold the AGM. They must put this decision in writing and address it to the company. The directors are then obliged to send the accounts to the members for review/approval. What is an Annual General Meeting (AGM) and does my company need to hold one?

Do charities need to file beneficial ownership information?

Yes, Irish charities are required to identify and file beneficial ownership information with the Central Register of Beneficial Ownership (RBO).

This caused some confusion because charitable companies do not have shareholders. Charitable companies must interpret the beneficial owner definition as it relates to their organisation, to identify the relevant individuals as the beneficial owners. Continue reading about Compliance of Irish Charities.

What is a social enterprise company?

A social enterprise is a business that provides essential services to address existing issues in the community. These companies attempt to solve major problems related to society or the environment such as accessible transport services, programs for children, community gardens or recycling facilities. Continue reading about Social Enterprise Companies.

Is a social enterprise a charity?

Typically, a Social Enterprise has the same vision/ mission as a charity, but they focus on trade in order to generate profits as opposed to collecting donations. A social enterprise company may wish to register for Charitable Status so their profits are tax-exempt. However, a social enterprise must be registered as a Company Limited by Guarantee (CLG) to be eligible for Charitable status. Continue reading about Social Enterprises vs Charities.

What is an unincorporated company?

An unincorporated company is an entity that does not need to undergo the incorporation process. In Ireland, individuals can register a business name as an extension of themselves. These are typically sole trader or partnership businesses that have unlimited liability, meaning that the owner’s personal assets can be seized to cover the debts or liabilities of the business. Continue reading about Unincorporated Entities.

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