As accountants, you're often the guiding force behind clients' entrepreneurial endeavours, especially when it comes to company formations. If you're assisting a client in establishing a Company in Ireland, understanding the intricate steps involved is paramount. Here's a detailed roadmap tailored specifically for accountants, outlining the process of forming a company in Ireland:
Step 1: Evaluation
Before proceeding, conduct a thorough analysis of your client's business objectives, risk tolerance, and tax considerations. Determine the most suitable structure from the available options, which include sole trader, partnership, or limited company.
Step 2: Choosing a Company Type
When registering an Irish company, it is important to choose the right company type. Depending on the type of business, there are a number of different options to choose from when setting up a company in Ireland.
Parts 1-15 of the Companies Act apply exclusively to Private Companies Limited by Shares as it is the most popular company type used. All other company types are dealt with in Parts 16-25.
The Companies Act broadly classifies companies to Private or Public and Limited or unlimited. Private or Public relates to who has ownership while Limited or Unlimited refers to repayment of debt.
Below is a list of the company types available under the Companies Act:
- private company limited by shares (LTD)
- designated activity company (DAC), which can be either
- private company limited by shares
- private company limited by guarantee and having a share capital
- private unlimited company (ULC)
- Public Limited Company (PLC)
- Public Unlimited Company (ULC)
- company limited by guarantee (CLG)
- an external company is an EEA or non-EEA company
- External Companies as not detailed within this blog, if you seek further information of external branches please contact the OmniPro Corporate Consultants team
For further information on Company Types please see our dedicated blog post here.
Step 3: Name Availability and Compliance
Perform a rigorous check to ensure the proposed company name complies with Irish company naming regulations and is available for registration.
CRO Guidelines for names which if not followed may result in name refusal;
- It is identical or similar to a name already appearing on the register of companies;
- It is offensive;
- It would suggest state sponsorship;
- A dissolved Company Name can be used again only after 20 years to the date the Company was Struck Off the register;
- Names containing certain words cannot be used unless approved by relevant bodies;
- For example, the words "bank", "banker", "banking", "banc", may only be used with the permission of the Central Bank of Ireland.
- Words such as "society", "co-op" or "co-operative" cannot be used unless prior permission has been sought from and granted by the Registrar of Friendly Societies.
- The words "University"(Ollscoil), "Regional Technical College"(Ceardcholáiste Réigiúnach) and "Institute of Technology" (Institiúid Teicneolaíochta) cannot be used unless permission has been sought from and granted by the Department ofEducation.
- The word “architect” either alone or in combination with any other words or letters, or name, title or description implying that the person is so registered, cannot be used unless a Notice of Determination has been issued by the Royal Institute of the Architects of Ireland (RIAI).
- This does not apply to the names “landscape architect”, “naval architect”, “architectural technician”, “architectural technologist”, and “interior design architect” and similar terms.
- If a name includes words which imply specific functions e.g. "holding company", "group" etc., further information may be required by the CRO to support the application.
- In the case of the word "Charity", further information may be sought by the CRO to support the application.
- The use of the word "standard" is prohibited.
- Eire can ONLY BE USED if the whole name is in Irish.
Additional parameters which should be considered when choosing a Company Name against other Company Names on the Register as indicated by the CRO include;
- Non- Distinguishing words;
- Service(s), Systems, Enterprises, Solutions, Products, Business, Community, Global, Ireland, Corporate, Irish, Holding(s), National, Standard, .ie, .com, .co.uk.
- Names that are classed as being too similar;
- Construction, Building, Developments, Home(s), Property,
- Transport, Logistics, Couriers, Haulage,
- Rentals & Hires,
- Pub, Bar, Public House,
- IT, Tech, Technology, Technologies
- Names/words that sound the same or are shortened
- Cool – Kool, Tech – Tek, Pat – Patrick
- Characters e.g. $ = S, € = E,! = I
Letters of Association/No Objection by a company with a similar name signed off by the Directors can be submitted with Form A1 to allow a certain company name to be used.
Step 3: Appoint Directors and Company Secretary
There is no formal qualification required to be a Company Director however the Company must ensure the person is eligible to hold the position of company director as certain parties and persons are ineligible to hold office including;
- Body Corporate/ Unincorporated body of persons,
- Under Age 18,
- Undischarged bankrupt, that is, someone who is going through the process
- A person disqualified from acting as a director,
- The statutory auditor of the company,
- Restricted person.
Every Company must have one EEA Resident Director. If there is not an EEA resident individual as a director the entity will be required to have a S.137 Bond in place or obtain a Real and Continuous Link from Revenue.
A Company Secretary may be a natural person or a body corporate.
Step 4: Draft Company Documents
Prepare the Form A1 and draft the Constitution that accurately reflects the company's objectives, internal regulations, and operational framework.
Step 5: Submission to the Companies Registration Office (CRO)
Applications to incorporate companies can be submitted under one of two schemes with the CRO, both of which have a different customer service standard.
- Fé Phráinn A1 Online: average five working days
- Ordinary Online A1: average ten working days
Post Incorporation
Step 6: Tax Registration and Compliance
Initiate the process of tax registration with the Revenue Commissioners promptly upon company incorporation. Depending on the nature of the business activities, guide your client through the registration for Value Added Tax (VAT), Pay As You Earn (PAYE), Corporation Tax, and other relevant taxes to ensure compliance with tax obligations.
Step 7: Establish Business Banking Facilities
Facilitate the establishment of a dedicated business bank account to segregate personal and business finances effectively. Evaluate banking options based on the client's requirements, considering factors such as transaction fees, online banking capabilities, and additional services offered.
Step 8: File Register of Beneficial Ownership
Identifying the beneficial owner(s) of a new company is a pivotal step in ensuring transparency and compliance with regulatory requirements.
New companies are required to file their beneficial owner(s) on Register of Beneficial Ownership (RBO) within 5 months of incorporation.
Step 9: Ongoing Compliance Obligations
Educate your client on the ongoing compliance obligations associated with company formation in Ireland. Stress the importance of filing annual returns with the CRO, maintaining accurate statutory records and registers, and adhering to tax filing deadlines to avoid penalties and regulatory scrutiny.
Conclusion
Navigating the process of company formation in Ireland demands meticulous attention to detail and comprehensive understanding of legal and regulatory requirements. As accountants, your expertise is invaluable in guiding clients through each stage of the process, from initial structuring decisions to ongoing compliance obligations. By following this comprehensive guide tailored for accountants, you can effectively support your clients in establishing and maintaining successful businesses in the dynamic landscape of Ireland.
If you would like to discuss setting up a company with our team please click here or call our offices on 053 91 000 00.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.
