By Tanya Doyle, 3rd December 2021
Setting up a new company can be an exciting but daunting task. You’ve got a great idea, found a niche in the market, or maybe you’ve decided to turn that hobby of yours into an income. You have the passion, the drive, and the skills to see it through but once you’ve decided to do it – how do you get started?
There are many things to consider before the company formation process can begin especially when it comes to the legal obligations of running an Irish Limited company.
Several steps need to be taken before a new company application can be lodged with the Companies Registration Office (CRO). It is important to be aware of the responsibilities and obligations of running a company as well the various legal requirements that must be met in order to set up a new Limited Company.
Steps to Consider before Incorporating a New Company
Choosing a Company Name
This is an important step; the company name is an integral part of the business identity and brand. The chosen name should be unique and clearly distinguishable from other registered companies in Ireland. A new company name cannot be the same or sound phonetically similar to any existing companies on the Register or it will be refused by the Companies Registration Office. Should your chosen name be rejected by the CRO, it may just be a case of adding a distinguishable word or some initials to create a difference and set it apart. If you are unsure about the company name you have chosen, fill out our free company name check form and our team would be happy to check the proposed company name.
Appoint a Company Director
A Director needs to be appointed to run and manage the company on behalf of the shareholder(s), ensuring that the Registers and documents are maintained by the company, including filing of the Annual Returns and the holding of the company’s Annual General Meeting. Further information on Directors’ Duties can be found here. A Private Limited Company (LTD) can have a single Director; however, it must then have a separate person/entity holding the post of Secretary. All Directors must be at a minimum 18 years of age and at least one of the proposed Directors must be a resident within the European Economic Area (EEA). If the company does not have an EEA-resident director, they will be required to enter into a Section 137 Non-Resident Director’s Bond, which Company Bureau can arrange.
Appoint a Company Secretary
Every company is required by law to have a Company Secretary. This can be a director if the company will have more than one director, however, in the case of a single director company, a separate person is required for the office of Secretary. The Company Secretary’s main functions are to oversee the company’s daily administration and ensure the company complies with company law – this includes co-signing Annual Returns, keeping Minutes of Board and General meetings, keeping the Company Registers, and providing Directors with legal and admin support. The role comes with a lot of responsibility, so it is imperative you choose someone who will rise to the challenge and take it seriously. Alternatively, if you don’t have someone to take on the role, Company Bureau can act as your secretary, we offer a range of Company Secretarial service packages to suit your needs. Our Cosec Team would be happy to talk you through your options and advise you on our services. More information on the duties of a Company Secretary can be found here.
Authorised and Issued Share Capital
The Authorised (Nominal) Share Capital of the company is the number of shares a company can assign over the course of its lifetime. There is no liability attached to authorised shares and they don’t physically exist until they are issued.
Issued shares are the shares that have been allotted, paid, and owned by the shareholders. They show the value of the company, and the shareholders are liable only for the number of issued shares that they hold. Company Bureau recommends an Authorised Share Capital of €100,000 divided into 100,000 shares with a value of €1 each.
Please Note: There is also an unlimited authorised share capital option for LTD companies’ as this option is only available to LTD companies (same with a single director). This option is quite popular because it leaves the company in a more flexible position should there be changes to the Share Structure in the future.
Outline the Shareholders/Company Members
A Shareholder is an individual or entity that holds at least one share in the company i.e. someone who invests in the company. The number of shares they hold reflects their proportionate ownership of the company. Once a shareholder agrees to become a company member their name is placed on the Register of Members. This register holds information on each member and is publicly accessible upon payment of a fee.
Shareholders must subscribe to the Company’s Constitution, agreeing to adhere to the rules and regulations of the company. The Companies Act 2014 and the Constitution set out the powers of the company which is then delegated to the Directors by the Shareholders/members.
Draft the Company Constitution
A Company Constitution is a legal requirement when setting up a new company. The Constitution is a formal document outlining the rules of the company and defines the relationship between the Directors and Shareholders, it is a binding agreement between them. The Constitution must be provided to the CRO with the new company application. The various items and clauses must be in line with the Companies Act 2014 or the application will be denied. Company Bureau provides a CRO pre-approved Constitution with our incorporation service that can be adjusted to suit your requirements.
Irish Registered Office Address
It is a legal requirement that the company has a registered office (official address) within the Republic of Ireland. This must be a physical address (not a post box) because most official correspondence regarding the company will be posted here. Should you require any assistance, Company Bureau offers a professional Irish Registered Office Address Service that includes mail forwarding for Domestic and International Companies.
Beneficial Owners – Who are they and when should I register them?
This is a person who owns directly or indirectly, they hold 25% or more of a company’s shares/voting rights. All companies are required to file information on their Beneficial Owners with the central register. Company Bureau recommends that you submit your RBO filing as soon as you have received the company incorporation number. Failure to make the filing within 5 months of incorporation will result in prosecution. Additionally, financial institutions will not open a corporate bank account until proof of this filing is provided. This has become an important step in the incorporation process. Company Bureau provides an RBO filing service and can take care of this on your behalf.
Company Bureau is Ireland’s leading Company Formation and Corporate Service practice. With over 20 years of experience, dealing with Company Registrations in Ireland and Internationally. If you are satisfied that you have met your obligations and responsibilities and are happy to proceed with setting up a new company, please order a limited company online today and we can have your new company incorporated in 2-3 business days. If you require any assistance meeting your responsibilities and obligations in setting up a new company in Ireland, please contact us today and our team of experts will be happy to answer any of your questions.
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.