Advantages and Benefits of a Limited Company
A company is a separate legal entity which is formed to facilitate the carrying on of business or to hold property or other assets. All companies, of course, are liable for all debts and other liabilities incurred whether in the course of trade or other activities. However, the shareholders, that is, the owners, of a limited liability company are only liable for the company’s debts and obligations up to the amount which they have contributed, or have agreed to contribute, to the shares of the company. (In the case or an unlimited company the owners are liable without limit for all debts and obligations of the company.)

• The corporate tax rate of only 12.5% applies to retained profits of the company and accordingly only income taken by Directors of the Company falls liable to tax a higher rate;
• A company can be used as a name protection device as two companies cannot have a similar name;
• The company can subject to specific conditions avail of certain exemptions when filing information with the Register of Companies;
• Such companies, under certain circumstances can obtain an exemption from the requirement to have their accounts audited;
• A company can often be regarded by its customers and other businesses as a more business-like entity to deal with;
• Certain tax incentives and reliefs can only be claimed by bodies corporate as distinct from individual taxpayers;
• Investors and new members can become involved with less formalities;
• Ownership of a company can be acquired by a larger number of investors than, say, partners in a firm;
• The members’ rights are usually comprehensively defined in the memorandum and articles of association, and
• The overriding advantage of using a limited company is the protection given to its members in the form of limited liability.

Directors
Every company is required to have at least two directors, both over 18 years of age, and one director must be a resident in the state. However, it is not necessary for the directors to hold shares and be members of their company. Directors have specific duties and responsibilities including:

• Ensuring correct management of the enterprise,
• Arranging the preparation of annual accounts, and as appropriate, the audit of same,
• Ensuring no liability is incurred beyond the ability of the company to discharge same,
• The employment and efficient supervision of staff.

Secretary
A company (including a single member company) is obliged to appoint a secretary at the time of its incorporation. (FORMit.ie acts as secretary for all new company formations during the period of incorporation only, before your nominated officer is appointed. The reason for this is to speed up the administration involved in forming all new companies.) A director may hold such position of secretary in addition to being on the board of directors.

The secretary has specific duties and responsibilities under company legislation, e.g. to ensure that the company complies with all legislation to which it is subject and to perform certain statutory functions.
He/she must advise the Board on matters of administration affecting the directors and personnel employed by the company, to ensure that all taxation and statutory requirements are met by the company and that its own internal regulations are being complied with.

Company Name
The proposed name of a company may be refused by the Registrar of Companies if he considers it to be too similar to that of any existing company or if he finds it otherwise unacceptable. For example, if it is phonetically similar to an existing company, or if a proposed title contains words similar to that of an existing company. A suggestion of state sponsorship would also be a reason for a refusal by the CRO. We will carry out a FREE Limited Company name check for your proposed company instantly.

Registered Office
A company is obliged to have a registered office address which need not necessarily be its business address. All official correspondence is sent to the registered office. The registered office can be anywhere in the State but the address must be a physical location and not just a post office box number.

Memorandum of Association
The memorandum of association is effectively the charter establishing the company, and, subject to legislation, providing the specific authority and powers to trade, invest and borrow. The amount of the authorised share capital of the company must also be stated in the memorandum although all of such authorised amount need not be issued.

Articles of Association
The articles of association are the rules which regulate the internal affairs of the company, including the powers and duties of its directors and secretary, and formalities attaching to the convening and holding of meetings and procedure of rules for members attending at same.

Taxation Benefits
A principal goal for a new entity is the achievement of maximum tax relief. Such can be achieved in a number of ways including:

• The efficient write-off of maximum expenses allowance,
• The maximum use of taxation by claiming benefit-in-kind (e.g. healthcare contributions and appropriate assurance and insurance planning),
• The efficient use of maximum contributions to a pension fund, and
• Ensuring that all allowances on capital expenditure on equipment is claimed.

Previous Tips of the Week
Tip #1: It is not necessary for the directors of a private limited company to hold shares and be shareholders of their company but directors have specific duties and responsibilities.

Tip #2: Start up a business and registration of a business name is obligatory if any individual, partnership or body corporate is planning to carry on a business under a name other than his/her own true name(s).

Tip #3: If you plan to start up a business form a private limited company as it can be used as a name protection device as two companies cannot have a similar name.

Tip #4: The corporate tax rate of only 12.5% applies to retained profits of a limited company and accordingly only income taken by Directors of the Company falls liable to tax at a higher rate.

Tip #5: The proposed name of a company may be refused by the Registrar of Companies if he considers it to be too similar to that of any existing company or if he finds it otherwise unacceptable.

Tip #6: When starting up a business proprietors who wish to hold the entire share capital in a Private Limited Company can do so by forming a "Single Member Company".

Tip #7: If you wish to start your own business or become self-employed then form a private limited company and avail of the corporate tax rate of only 12.5% that applies to retained profits.

Tip #8: Every company is required to have at least two directors, both over 18 years of age, and one director must be a resident in the state. However, it is not necessary for the directors to hold shares and be members of their company.

Tip #9: Every company formed has a memorandum of association which effectively is the charter establishing the company and, subject to legislation, providing the specific authority and powers to trade, invest and borrow.

Tip #10: Registration of a business name is obligatory if any individual, partnership or body corporate carries on business under a name other than his/her own true name(s).

Tip #11: A company is obliged to have a registered office address which need not necessarily be its business address. All official correspondence is sent to the registered office.

Tip #12: If you wish to start your own business then form a private limited company as it can then be used as a name protection device as two companies cannot have a similar name.

Tip #13: Start your own business by registering a business name or alternatively form a limited company and avail of the corporate tax rate of only 12.5% that applies to retained profits.

Tip #14: When you start your own private limited company the articles of association are the rules which regulate the internal affairs of the company, including the powers and duties of its directors and secretary.

Tip #15: The proposed name of a limited company may be refused by the Registrar of Companies if he considers it to be too similar to that of any existing company or if he finds it otherwise unacceptable.

Tip #16: A company (including a single member company) is obliged to appoint a secretary at the time of its incorporation. A director may hold such position of secretary in addition to being on the board of directors.

Tip #17: A principal goal when starting up a business is the achievement of maximum tax relief. This can be accomplished in a number of ways by starting up a Private Limited Company.

Tip #18: A Private Limited Company is a separate legal entity and the Irish corporate tax rate of only 12.5% applies to all retained profits of any Private Limited Company actively trading.

Tip #19: Did you know registration of a business name is obligatory if any individual, partnership or body corporate is planning to carry on a business under a name other than his/her own true name(s)?

Tip #20: The secretary has specific duties and responsibilities under company legislation, e.g. to ensure that the company complies with all legislation to which it is subject and to perform certain statutory functions.

Tip #21: Your private limited company does not need to start trading immediately. A simple annual return and nil accounts statement will be required each year to preserve the company’s status.

Tip #22: Every company director is obliged to ensure that an annual return on behalf of his/her limited company is delivered to the CRO at least once in every calendar year. We at FORMit.ie can provide this service for you if required.

Tip #23: Any existing company must give notice to the Registrar of Companies of the appointment or change of directors/secretaries within 14 days from such appointment or change.

Tip #24: Following all company formations every limited company must hold an Annual General Meeting once in every year. The Annual General Meeting must be held in the State unless all the members entitled to attend and vote consent in writing to it being held elsewhere.

Tip #26: Following all company formations any company which does not file its annual return in respect of any one year is liable to be struck off the register and dissolved. On dissolution, any assets will vest in the Minister for Finance by operation of law.

Tip #27: The corporate tax rate of only 12.5% applies to retained profits of a limited company and accordingly only income taken by Directors or employees of the Company falls liable to tax at a higher rate.

Tip #28: Every company formed has a memorandum of association which effectively is the charter establishing the company and, subject to legislation, providing the specific authority and powers to trade, invest and borrow.

Tip #30: New start-up limited companies which commence trading in 2009 will be exempt from tax including capital gains, in each of the first three years to the extent that their tax liability in the year does not exceed €40,000.