FAQ's
The first step to setting up a company 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.
There are three main benefits of Irish Limited Companies or LTDs:
- 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.
- 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.
- 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?
It is a relatively straightforward process to switch from a Sole Trader to a Limited Company:
- File a cessation of business name form with the CRO.
- Choose a company name. You may wish to re-register the same business name you were previously trading as (subject to availability).
- Chose the appropriate limited company type. A Private Company Limited by Shares (LTD) is the most popular company type for business ventures in Ireland.
- 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.
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.