(Part 2 of the Doing Business in Ireland series)
When setting up a business in Ireland it is important to understand the legal and regulatory requirements for all businesses and those applicable to particular areas of business e.g. financial services, transportation and agriculture, as well as the options for the different types of business structure.
The legal basis for setting up a company in Ireland is the Companies Act 2014 which includes regulations on the use of company names and company registration.
Setting up a company in Ireland requires:
It is important to understand the difference between incorporated and unincorporated companies when registering a company in Ireland.
The principal feature of an incorporated business is that it has a legal status separate from its owners. This means that the company is a separate legal entity and affords protection for its owners from some liabilities incurred in running the business. An unincorporated business does not afford such protection. However, limitation of liability does not extend to situations where the owners and directors have given personal guarantees or may have acted improperly in running the company.
The main types of business structure in Ireland are:
The most common type of company structure in Ireland is a company limited by shares. Ireland has a minimum share capital requirement of just €1, making it quite easy to establish a new business.
Overseas companies may also use a branch structure as a division of a foreign company trading in Ireland. For a foreign corporation to be deemed to have a branch in Ireland for corporate law purposes, its Irish operation must be trading in Ireland, have an element of permanency, a separate management structure which enables it to negotiate contracts with third parties, and an element of financial independence.
EU regulations have been implemented that impose a similar registration regime on branches to that imposed on local companies.
Branches undertaking business in Ireland must file basic information with the Registrar of Companies including certified copies of the constitution of the company, information on its directors and other documents. In addition the company is required to file the same accounts as it would if it was incorporated as a limited company.
The timescale for incorporating a company in Ireland may take as little as one week but, on average, one should allow two to three weeks.
Under Irish law, a partnership is termed as the relationship that exists between two or more individuals carrying on business with a view to profit. Most partnerships are between individuals but partnerships can exist between an individual and a business or corporate entity or between companies themselves. Partnerships do not have a separate legal personality in the eyes of the law and, therefore, enter into operation in the name of the partners.
Partnership agreements are legally formalised by a written partnership agreement or, if a formal agreement does not exist, a partnership is governed by the provisions of the Partnership Act of 1890. There is no legal obligation to prepare accounts but partnerships usually will and certainly should do so even though there is no obligation to file or publish them. However, partnerships are required to file tax returns.
A limited partnership is comprised of a least one general partner and one or more limited partners. The general partner has unlimited liability whereas the limited partners are liable for partnership obligations only to the extent of the cash and property they contribute. Where no written partnership agreement exists, limited partnerships are governed by the Limited Partnership Act 1907. If, however, the general partner is a limited company, the limited partnership is obliged to file its accounts for public record with the Companies Registration Office.
A partnership, limited or general, is required to register the business name of the partnership with the Registrar of Business Names.
Whether you are an overseas business or already based in Ireland, contact us for help and advice on starting a business in Ireland.