Last minute panic!! This can happen pretty often when forming a company…
Everything else has been done and you go into the bank and they ask you for the Certificate of Incorporation and suddenly there’s a mad scramble to get the company formed ASAP.
This is why the process needs to be started early and the best course of action is to engage the assistance of an experienced company secretarial advisor or company formation agent. It might cost you a few extra euro but will save you in the long run.
Here are some important tips to consider if you’re thinking of forming a company –to ensure the process is as hassle free as possible!
- Company Name
This is one of the most important things to check first. You could spend so much time researching a great name for your business but then go to form the company and find the name is unavailable!! Names are difficult to get as they have to be sufficiently distinguishing from any company already on the Register of Companies. Even if a company has been dissolved the name is still protected for 20 years! Also don’t always trust the CRO namecheck/website as this should really only be used as a guide and it may not always inform you if a name is not appropriate… You can always give us a call to enquire about the company name, we’re doing it every day so we’re well used to what will be accepted and what won’t.
Finally please do not incur any costs or put anything into the company name until the company has been formed and the digital certificate issued as the name is only confirmed when the digital certificate has been issued. For more info on names click here
- Company Type
Once upon a time company types were easy, however since the advent of Companies Act 2014 it’s slightly confusing. Even Dermot & Dave on Today FM were saying just this week they didn’t have a clue what a DAC is!!
So to keep it simple:
- An LTD is used for 95% of company types that are trading to make a profit.
- If you need to have a stated objects clause or a regulated entity then a DAC (Designated Activity Company) is the appropriate company.
- Unlimited Companies (UC) are used if you want to try keep the financial statements private.
- A Public Limited Company (PLC) is for large organisations and
- A Company Limited by Guarantee (CLG) is for charities and not for profit organisations and management companies.
- One Director Company
What an innovation for SME companies! Instead of having to force the poor husband, wife, partner or even Mammy to act as a second director, if you are setting up an LTD company you can now have just one director.
However you still must have a second person involved to act as the company secretary. This may be a person or a company and they will have less duties and responsibilities than a director but now there is one stipulation to bear in mind: they are required to have the necessary skills or resources to carry out this role.
The “Constitution” has replaced the old Memorandum and Articles of Association. The company type you choose will depend on the appropriate format of the constitution. LTD companies should be careful about choosing the 1 page sample constitution as it may not contain the provisions it requires such as the authority of directors to allot shares, dis-application of pre-emption rights or authority to communicate with members electronically. I would encourage adopting a more comprehensive constitution so that the company can act as efficiently and effectively as possible.
- Residential Address
One common question we get asked: Is it necessary to disclose you residential address? This is understandable in the age of Google maps and technology and it’s not uncommon for people to be uncomfortable disclosing this information.
In answer however the Act does require the residential address to be disclosed. It can be kept private but only on application through the Gardaí by showing there is a threat to your safety or security.
LTD companies do not require an activity clause or objects clause however they need to pick a NACE code to give the CRO an idea of what activities the company is going to carry out. (Ltd companies now have the capacity of a natural person)
All other company types must have an objects clause.
- Share Capital
LTD companies now have the option of having an authorised share capital – this is the maximum number of shares that a company can issue. Most new companies are choosing not to have an authorised share capital figure and this is probably the best option as it can always be inserted into the Constitution in the future and this option also gives the company more flexibility to allot shares.
- Shareholder and Members
All companies may have one members (shareholder) and this can be either an individual or a company.
- What is a Company Pack and what is the Company Seal used for?
The company pack contains all the legal documentation that you will require to get started:
- Company Constitution
- Minutes of the First Meeting of the Company
- Company Register
- Share Certificate(s)
- The Company Seal
The seal is used when the company is entering into a contract that requires the company to seal the agreement such as a lease.
- Business Name
Last but not least…
If the company name you wanted was not available or you want to trade under a different name then you may register a business name. This allows the company to trade under different names or if it has different brands or products. The advantage of a business name is it is easier to get but be careful as there is little protection for a business name so be aware of someone passing themselves off as your business. The CRO will issue a digital business name certificate and the bank will require a copy of this certificate to accept payments in the business name.
Have we covered everything? Let us know in the comments if you’ve any more questions about forming a company in Ireland!
How Can CLS Help
Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.