As long as all your legal requirements are complete, starting and registering a company/business/startup in Ireland is not difficult. This step-by-step guide for registering a company in Ireland will help in taking care of your checklist before you start doing your own business in Ireland.
Following is a detailed checklist which will enable you to form an Irish Limited Company in the land of opportunities:
Name At Least One Director
At the outset, your company must have at least one Director. Companies in Ireland do have one Director and s/he should be a resident of an EEA country. In the case of having a non-EEA Director, then you would be required to get a non-EEA residents bond before you go on to setup your company.
The primary responsibility of a Director is that s/he manages the company on behalf of its shareholders. In addition, Directors often play the role of shareholders in companies which are relatively smaller in size.
Also Read: List of startup grants in Ireland
Select A Company Secretary
If your company has just one Director, you will be legally bound to recruit a separate Company Secretary. However, if your company has more than one Director, then either of them could work as a Company Secretary too. The option of outsourcing this position is also available.
One of the key roles of the Company Secretary is to file annual returns every year. S/he also works with the Accountant of your company to make sure all financial statements are timely filed. In case of late filing, a fine up to €1,200 could be imposed. Moreover, company’s financial statements could also be audited for two years. Therefore, the significance of a Company Secretary cannot be negated.
Name At Least One Shareholder
Just like Director, naming at least one Shareholder is also essential before registering a company in Ireland. Fundamentally, shareholders are the owners of your company. Startups do have this tendency of naming one of their Directors or Company Secretary as the Shareholder of the company.
Number of Shares To Be Given Away
Deciding on how many shares of your company you could give away as shares could be a pivotal decision. Subsequently, the number of shares selected will eventually determine the legal ownership of the company. Realistically, there are two types of shares which could be issued before setting up an Irish Limited Company:
Authorized Shares are those shares which could be issued either now or in the future. These are more like an aspirational shares as they carry no monetary value. Moreover, such shares do not affect the value of the company.
On the other hand, Issued Shares are those which have been acquired by the shareholders against a sum of money. For instance, if 100 shares are allocated to one shareholder then that shareholder will have 100% stake in the company. Therefore, allocation of shares actually controls the percentage of stake a shareholder has in the company.
It is recommended to issue 100 shares of €1 in value and have authorised shares of 100,000. This would mean that if you want to ‘issue’ shares later, you have many shares available to issue.
Register Office And Business Address
Before you register a company in Ireland with the Companies Registration Office (CRO), both these addresses will be required. A registered office address is basically the official, legal address of your company. The location of the site has to be physically there and it should be monitored regularly. It is an address at which legal notices are delivered by government or other interested bodies. Do not forget to register the address in compliance with the law.
On the contrary, a business address is where the real activity and day-to-day operations of the business are carried out. Therefore, it is important to have a real business address in Ireland for the purposes of applying for Tax Registration. Furthermore, it is also important that you have resources at that address to run the business if you are applying for an Irish VAT number.
Choose A Unique Name Of Your Company
This is probably the first thing before anyone looks to establish a company/business anywhere in the world. The name of your company has to be unique, different and shouldn’t be similar to any of the existing Limited Companies in Ireland. The Registrar at the CRO will run a name-check and if the proposed name is not strong or unique, the submission will be returned.
You can also check whether the proposed name of your company is available through CRO’s Company Search Facility.
Incorporate Your Company
If all the aforementioned requirements are met already, it’s now time to prepare and sign the incorporation documents. A company can be incorporated via Companies Online Registration Environment (CORE) or by outsourcing it. Pile up all the aforementioned details and you will be good to complete the formalities.
Purchase Your Company Seal
Once your company is incorporated and its name is approved, it will now be time to order your company seal. The seal has to have company’s name engraved on it. Moreover, it should be used to seal the official company documents before your dispatch it to the recipient. Some of the documents (not limited to) which could be sealed are:
1. Transfers of shares
2. Company law
3. Contract law
4. Property law
A company seal could be ordered while you are in the middle of registering your company. As a result, as soon as your company is registered with the CRO, the seal will be with you.
Open A Business Account In Ireland
This is one of the key steps before you register a company in Ireland. Once a company is registered, you will be required to open a business account in any of the Ireland’s banks. For that, at least one face-to-face meeting will be essential. In addition, you will also need all the necessary company documents, including the original incorporation certificate, company’s constitution and whatever is demanded [at that time].
Following are the type of taxes your company will have to register for:
1. Corporation Tax
Regardless of company’s size, all Irish Limited Companies need to pay Corporation Tax. Therefore, to qualify for 12.5% Corporation Tax, you will have to prove that your company is actively carrying the economic activities and is being centrally managed in Ireland.
If your company fails to qualify for this type of tax, you will still need to register with Revenue for Tax. Later, you will be subject to 25% Corporation Tax. You shall guide your accountant to file all the payments and returns online through the Revenue Online Service (ROS).
2. Value Added Tax (VAT)
If your manages to generate a sum of €75,000 or above from the sale of goods or €37,500 or above from the sale of services over a period of 12 months, then you will have to register for VAT. Please note, this tax will be applicable for rolling 12 months and not annually. Therefore, you can register for VAT only when your sales surpass the threshold level.
3. Relevant Contracts Tax (RCT)
You become eligible for RCT only if you are a principal contractor.
A principal contractor is someone who hires a sub-contractor who later carries out business activities on behalf of your business. A sub-contractor could be from any of the following industries:
Construction, forestry and meat processing.
4. Employers PAYE
If your business requires human resource, you will have to register as an employee to operate a payroll. Subsequently, the owner will then deduct relevant Employers PAYE tax, USC and PRSI from the wages.
File Annual Returns
Once a company is incorporated, the accountant will be required to file annual returns with the CRO. Even if you are not trading, you will still be required to file annual returns. Moreover, every company gets an annual return allocation date.
Your company’s first annual return date is due 6 months after incorporation. The second annual return date is due 12 months after your 1st annual return.
The accountant of the company will have to prepare a balance sheet, profit and loss account, director’s report and often, an auditor’s report every year.
Do Not Delay Annual Returns
It is advisable to not delay filing annual returns otherwise you will have to pay hefty fines. For example if you fail to file annual return for the first time, a fine of €100 [till a specific date] and then €3 per day after that will be incurred. The penalty goes up to €1200 per year. Therefore, deadlines are significant. Do take care of ’em.
If you have got this far by ticking off the aforementioned checklist then you are good to establish an Irish Limited Company. Good luck!