What are the different company types?

One of the first steps in setting up a company will be to select an appropriate company type. The activities of the company will determine the most appropriate company type.

Company Types

See below for more information on the different company types and In short:

  • Private Company Limited By Shares (LTD)
    • Most common trading company type
  • Designated Activity Company (DAC)
    • Used for a specific purpose or a regulated company with a stated objects clause
  • Company Limited by Guarantee (CLG)
    • Not for profit, charitable or property management companies
  • Unlimited Company (UC)
    • The only company type that maybe exempt from filing financial statements
  • Public Limited Company (PLC)
    • Large trading companies

What is the difference between an LTD and a DAC

This is a very common question and in short an LTD company has the capacity of a natural person where a DAC has a stated objects clause. Also regulated companies, credit institution or an insurance undertakings must be DAC’s. For more information click on this link

Ten Things to Know About an LTD Company

A Private Company Limited by Shares (LTD company), is a new simplified model of the Private limited company and are registered under Part 2 of the Companies Act 2014. This will be the most common company type for SME companies.

Ten Features of an LTD company are:

  1. The company name must end in the suffix Limited or LTD or Teoranta
  2. The company may have a minimum of 1 director
  3. The Company Secretary cannot be the sole director
  4. The company may have between 1 – 149 shareholders
  5. The shareholders have limited liability and there is no requirement for an authorised share capital
  6. The company has a one document constitution
  7. The company has no objects clause – full and unlimited capacity of a natural person
  8. The company may dispense with holding a physical AGM – written resolution required each year
  9. The company is eligible to avail of audit exemption an d to file abridged financial statements if under the thresholds
  10. The company cannot list debts or securities or be a credit institution or an insurance undertaking

What are the Ten Most Important Features of a DAC Company?

A DAC is a private company limited by shares registered under Part 16 of the Companies Act 2014. A DAC is actually the closest company type to an Existing Private Limited Company (EPC). The biggest difference between a DAC and LTD is that a DAC requires an Objects Clause.

Companies that want to have a stated objects clause or are regulated entities may become a DAC.

  1. The company name must end in the suffix “Designated Activity Company”, or “DAC”
  2. Minimum of 2 Directors
  3. Secretary may be one of the Directors
  4. 1-149 Shareholders
  5. The Shareholders have limited liability and the company must have a stated Authorised Share Capital
  6. The company has a two document constitution made up of a Memorandum of Association and the Articles of Association
  7. The activities and capacity is limited to the Objects Clause in the Memorandum
  8. The company cannot dispense with holding the AGM (unless its a single member Company)
  9. The Company is eligible to avail of Audit Exemption and to file Abridged Financial statements if under the thresholds
  10. Can list Debts & Securities and can be a Credit Institution or an Insurance Undertaking

What are the Ten Most Important Features of a CLG Company?

A CLG is a company limited by guarantee, which does not have a share capital and is registered under Part 18 of the Companies Act 2014. A CLG is typically used for not for profit organisations, representative bodies and sporting or charitable organisations and management companies which require to be a body corporate but do not require to raise funds by way of share capital.

Companies that were companies limited by guarantee without a share capital before 1stJune 2015 do not have to convert as they automatically became a CLG but must change its name to include the suffix “company limited by guarantee” or “CLG” . If the company does not change its name before 20thNovember 2016 the CRO will change the name and issue the company with a new Certificate of Incorporation. The old Memorandum & Articles of Association will continue to exist however the company should adopt a new constitution in accordance with the Companies Act 2014.

One new provision is the CLG’s may convert to an LTD or DAC and an LTD or DAC may convert to a CLG for the first time under Part 20 of Companies Act 2014.

Ten Features of a CLG are:-

  1. The company name must end in the suffix “Company Limited by Guarantee”, or “CLG”
  2. Minimum of 2 Directors (charity companies are required to have 3 directors)
  3. Secretary may be one of the Directors
  4. Unlimited number of members or the number of members may be set in the constitution and the company may increase this number
  5. The members have limited liability up to the amount stated in the constitution (typically €1)
  6. The company has a two document constitution made up of a Memorandum of Association and the Articles of Association
  7. The activities and capacity is limited to the Objects Clause in the Memorandum
  8. The company cannot dispense with holding the AGM (unless its a single member Company)
  9. The Company is eligible to avail of Audit Exemption and to file Abridged Financial statements if under the thresholds. Charitable organisations may be exempt from filing financial statements with the CRO and instead file its financial statements with the Charities Regulator
  10. CLG’s above a certain thresholds will be required to prepare Directors Compliance Statements

What are the Ten Most Important Features of a Unlimited Company?

An unlimited company (“UC”)is an company where the shareholders are not protected by limited liability. It might seem unusual that anyone would want to trade in an company that has unlimited liability whoever certain professions cannot operate through a limited liability company. Also depending on who owns the shares, certain unlimited companies may not have to file financial statements with the CRO and this is something that companies find very beneficial for privacy reasons.

There are 3 types of unlimited company

  • a private unlimited company — referred to in this Part as a “ULC”;
  • a public unlimited company — referred to in this Part as a “PUC”; and
  • a public unlimited company that has no share capital — referred to in this Part as a “PULC”.

Ten Features of a UC are:

  1. The company name must end in the suffix “Unlimited Company”, or “UC”
  2. Minimum of 2 Directors
  3. Secretary may be one of the Directors
  4. Minimum of 1 shareholder
  5. The liability of the shareholders is unlimited
  6. The company has a two document constitution made up of a Memorandum of Association (objects and powers) and the Articles of Association (internal rules)
  7. The activities and capacity is limited to the Objects Clause in the Memorandum
  8. The company cannot dispense with holding the AGM (unless its a single member Company)
  9. The Company is eligible to avail of Audit Exemption and to file Abridged Financial statements if under the thresholds.
  10. The company may be exempt from filing financial statements if one of the shareholders has unlimited liability (individual or another unlimited company)

 

Please Note:

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.

Back to Company Formations

Let’s start the conversation

Get in touch with CLS today.

CONTACT US

Back to Top