Blog
The Differences Between Limited & Unlimited Companies in Ireland
By Tuulikki Hohenthal, 16th September 2022
When it comes to setting up a new company, there are many things that need to be considered before you put anything in motion. A major decision is determining which company type is best suited to you and your proposed business. This blog has been curated to assist you in deciding which company type best suits your needs. This information will help you to make a confident choice between a Limited Company and an Unlimited Company.
Limited Company
A Limited Company is a class of private company. This is the most popular company type in Ireland. When a business is set up as a Limited Company it must carry the suffix “Limited” or “Teoranta” (the Irish word for ‘Limited’).
The shares in a Limited company are owned privately by the shareholder/s who have limited liability. This means that the liability of the shareholder to the company’s creditors is limited to the capital that was originally invested, the nominal value of the shares, and any premium paid in return for the issue of the shares by the company. A shareholder’s personal possessions are protected in the case of insolvency. This company type does not have an objects clause in its constitution, therefore it is permitted to trade in any unregulated activity. If a Limited Company is a multi-member company, it can then dispense with AGM regulations.
Requirements of a Limited company:
- Must have at least one Company Director
- Must have at least one Company Secretary
- Must have at least one Shareholder
- No objects clause required
- Must submit Annual Returns to the Companies Registration Office which include financial statements and certain reports
Unlimited Company
An Unlimited Company is very much a regular private company limited by shares and it is becoming more popular in Ireland. This type of company must use the suffix “Unlimited Company” (ULC) or “Cuideachta Neamhtheoranta” (the Irish word for ‘Unlimited’). Unlike a Limited company, the shareholders of an Unlimited Company do not enjoy limited liability, meaning that their personal assets are at risk should the company become insolvent. This company type must have an objects clause in its constitution. This means that the company can only trade in the industry or activity specified in the objects clause and cannot deviate from those activities. Differently from a Limited Company, an Unlimited Company can only dispense with AGM requirements if it is a single member company. An Unlimited Company has the option to not submit financial statements in certain situations, meaning the company has greater confidentiality than that of a Limited Company.
There are three types of Unlimited Company in Ireland:
- Private Unlimited Company (ULC) with a share capital
- Public Unlimited Company (PULC) without a share capital
- Public Unlimited Company (PUC) with a share capital
Requirements of an Unlimited Company:
- Must have at least two Company Directors
- Must have at least one Company Secretary
- Must have at least one Shareholder
- Must have an objects clause in its Constitution
In summary, the main difference between these two company types is whether shareholders possess limited liability or not as well as the differences in their reporting requirements to the Companies Registration Office (CRO). For example, if you wish to have a company where the shareholders’ personal assets are protected from company creditors (limited liability), a Limited company is the best option. The trade-off, however, is that you must submit financial statements to the CRO which are publicly accessible. If you wish to register a company where the public cannot access the financial statements, an Unlimited Company might be more suitable, with the trade-off here being that the shareholders will not enjoy limited liability.
If you need help in deciding which Company Type best suits you and your company’s needs, please contact us on +353(0)1 6461625 or fill out our contact form. The Company Bureau team are here to assist you with all of your company formation needs.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.
