Adrian Burke & Associates
Commercial Lawyers, Corporate Lawyers and Solicitors specialising in Corporate Finance, Ireland

Incorporating an Irish Company

   

There are various business entities for investors to choose from in Ireland, including Companies limited by shares, designated activity companies, unlimited companies, public limited companies, branches and partnerships. Similar to the US corporation, the private limited company is the most common form of Irish company. The main advantage of the company limited by shares is that shareholder liability is limited to the amount they agreed to pay for the shares.

The incorporation process can take from 5 to 20 days depending on whether agreed form documentation is used. The fast-track procedure can reduce this timeline to between 5 and 10 days. On incorporation, a company limited by shares (the most common type of company) must have at least one shareholder, one director, a company secretary and an Irish registered office (the director and the company secretary cannot be the same person). All other types of corporate entities (other than the company limited by shares) must have two directors. In addition, it must complete a declaration confirming that it will carry on an activity in Ireland and file this with the incorporation documentation in the Companies Registration Office ("CRO"). Adrian Burke & Associates' company secretarial division, provides a range of company incorporation and secretarial services.

The Constitution (similar to the US Charter or By-Laws) sets out the company's parameters and regulations and are filed with the incorporation papers. The Constitution governs the internal regulation of the company and can be amended after incorporation by shareholder resolution. 

In addition to companies limited by shares, there are a number of other business entities which a potential investor might consider. These include public limited companies, unlimited companies and partnerships. We advise on all of these entities.

Incorporating a Company vs Establishing a Branch

The establishment of a branch may be an alternative investment vehicle used in certain circumstances. Although such operations are not generally as advantageous as incorporating an Irish company, they may serve a particular purpose. A corporation will be deemed to have a branch in Ireland if its Irish operation is trading in Ireland, has an element of permanency, has a separate management structure which enables it to negotiate contracts with third parties, and has an element of financial independence. Foreign corporations establishing a place of business in Ireland are obliged by law to register with the Companies Registration Office. Foreign corporations with branches in Ireland are required to file their accounts publicly each year in the Companies Registration Office. An Irish branch of a foreign company is only liable to Irish corporation tax on profits arising out of the Irish branch income. Generally, the foreign company will obtain credit in its home jurisdiction for any Irish corporation tax paid by the branch provided that the home country has entered into a double taxation treaty with Ireland. From a tax perspective, branch structures may be preferable when operating losses are anticipated in the Irish operation as such losses may be used to reduce taxes paid in the home jurisdiction of the foreign company.

Post-incorporation compliance requirements?

Irish companies and other business entities have various obligations under Irish legislation. We can provide you with detailed advice at the time of incorporation however, a brief summary of some of the main obligations is outlined below:

1. Annual Return Filing

A company is obliged to deliver an annual return at least once in every year to the CRO. The annual return contains details of the company's directors and secretary, its registered office as well as details of shareholders and share capital. Every company is required to file its first annual return within six months of the date of incorporation. Failure to file the annual return on time will result in the company incurring penalty fees and possible strike-off proceedings, as well as loss of the company's audit exemption for 2 years (if applicable).

2. Audited Accounts

As a general rule the annual financial statements of Irish companies are required to be audited by a registered auditor. However, a company limited by shares which is not a parent company or subsidiary company may avail of an exemption provided that it satisfies two or more of the following conditions in the current financial year and the preceding financial year: (i) the company's turnover does not exceed €8 million; (ii) the company's balance sheet does not exceed €4.4 million; (iii) the company has less than 50 employees.

3. Maintenance of Statutory Registers

Statutory books and records must be maintained including a register of members, register of directors and register of debentures etc. In addition, a company is also required to keep minutes of meetings of the members and directors. Directors must prepare and maintain financial records which disclose the financial position of the company.

4. Periodic Filings to be made in the CRO

A company is required to make various filings at the CRO when it carries out certain actions. For example, if it changes its name, changes its directors or secretaries, changes its share capital, creates a charge over its assets, passes a members' resolution or amends its memorandum and articles of association etc., the appropriate form will need to be filed at the CRO.

5. Tax Returns

A corporation tax return must be made every year. If the company is VAT registered VAT returns must be made every two months.

Adrian Burke & Associates has been recommended by the Legal 500 as having a strong practice in foreign direct investment, for being "straight talking and honest" and for having a "genuine interest in the underlying transaction".

August 2015

The above is a very general and simplified summary of the law on the subject matter. As such you should obtain professional advice before taking any actions as regards you or your company's affairs. Should you wish to make enquiries in relation to any of the areas touched on by this article please contact Adrian Burke & Associates.