Types of Company
CRO Leaflets Extract
CRO Leaflet
Types of company
There are a number of types of company available to be registered under the Companies Act 2014.
The majority of companies registered in Ireland are private limited companies and, of those, most are
*Note that the rates charged for the use of 1890 (LoCall) numbers may vary among different service providers.
small with only one or two members.
There are a number of types of private company, which can be incorporated under the Companies
Act 2014:
• Private company limited by shares (LTD)
• Designated Activity Company (DAC) limited by shares
• Designated Activity Company (DAC) limited by guarantee
• Private Unlimited Company (ULC)
There are several types of public company:
• Public Limited Company (PLC)
• Public Unlimited Company (with shares)(PUC)
• Public Unlimited Company (without shares)(PULC)
• Company Limited by Guarantee (CLG)
• Societas Europaea (SE)
……
2. COMPANY/TYPES
2.1
What is a limited company?
The shares in a company are owned by its shareholders. If the company is a limited liability company,
the shareholders’ liability, should the company fail, is limited to the amount, if any, remaining unpaid
on the shares held by them. A company is regarded as a separate legal entity and, therefore, is
separate and distinct from those who run it. The company (and not the individual shareholders) is
the appropriate person to be sued in the event that debts are incurred by the company which remain
unpaid despite demand.
There are several types of limited companies:
A private company limited by shares (LTD): The members’ liability, if the company is wound up, is
limited to the amount, if any, unpaid on the shares they hold. The maximum number of members is
149. A LTD company does not have a memorandum of association. A LTD company can have one
director if required. (If it has one director only, it must have a separate secretary). A LTD company has
no objects stated in its constitution. It cannot be a credit institution or insurance undertaking.
A designated activity company limited by shares (DAC): The members’ liability, if the company
is wound up, is limited to the amount, if any, unpaid on the shares they hold. The maximum number
of members is 149. A DAC company does have a memorandum of association in its constitution
specifying its objects. A DAC company must have at least two directors.
A company limited by guarantee having a share capital (DAC): As this is a private company,
the maximum number of members is 149. The members have liability under two headings; firstly,
the amount, if any, that is unpaid on the shares they hold, and secondly, the amount they have
undertaken to contribute to the assets of the company, in the event that it is wound up, being not
less than €1. Such a company under the new Act is a Designated Activity Company and has specific
objects set out in its constitution. A DAC company must have at least two directors.
A company limited by guarantee not having a share capital (CLG): This is a public company
type. The members’ liability is limited to the amount they have undertaken to contribute to the assets
of the company, in the event it is wound up, not exceeding a specified amount and subject to a
minimum of €1. If a guarantee company does not have a share capital, the members are not required
to buy any shares in the company. Many charitable and professional bodies find this form of company
to be a suitable vehicle as they wish to secure the benefits of separate legal personality and of limited
liability but do not require to raise funds from the members. A CLG company must have at least two
directors.
A public limited company (PLC): The liability is limited to the amount, if any, unpaid on shares
held by the members. It should be noted that it is unlawful to issue any form of prospectus except in
compliance with the Companies Act. A PLC company must have at least two directors.
2.1.1 What are the characteristics of a limited company?
• Unlike a sole trader or partnership, the company has a separate legal existence. This means that
it is the company itself which owns property and that it is the company which may sue and be
sued in respect of the business of the company.
• The company continues to trade irrespective of director or management changes until the
company is wound up.
• There is limited liability. This means that, should the company fail, the shareholders’ liability is
limited to the amount of share capital contributed by them (i.e. the price of the shares held by
them). The personal assets of directors/shareholders cannot be seized to pay off company debts.
2.2
What is an unlimited company?
In an unlimited company, there is no limit on the liability of the members. Recourse may be had by
creditors to the shareholders in respect of liabilities that may be owed by the company which the
company had failed to discharge.
2.3
What is a UCIT?
A UCIT is a public limited company formed under EU Regulation (European Communities
(Undertakings for Collective Investment in Transferable Securities) Regulations 1989 & 1999) and the
Companies Act 2014. The sole object of a UCIT is the collective investment in transferable securities
of capital raised from the public that operates on the principle of risk-spreading.
The competent authority, which must approve all registrations of UCITS that wish to carry on
activities within the State, is the Central Bank of Ireland.
2.3.1 How can I register a UCIT?
Submit Form A1 (form of incorporation of a new company) and the draft memorandum and articles of
association to the CRO.
2.4
What is a Societas Europaea?
A Societas Europaea or SE is a European public limited company formed under EU Regulation
(Council Regulation 2157/2001) and Statutory Instrument 21 of 2007. SE’s can be formed by merger,
as a holding company or subsidiary or by conversion from a plc. Article 3 and 10 of the Regulation
requires Member States to treat an SE as if it is a public limited company formed in accordance with
the law of the Member State in which it has its registered office.
An SE can be formed in several different ways, each with different requirements:
• by merger,
• as a holding company,
• as a subsidiary,
• an SE can form a subsidiary SE.
• an SE can be formed by a PLC converting into an SE.
Upon registration, an SE has legal personality. The registered office and the head office must be in the
same Member State. A Societas Europaea has share capital and no shareholder is liable for more than
the amount subscribed. An SE is required to have a minimum amount of subscribed share capital of at
least EUR 120,000. Please see Information Leaflet 19 – Societas Europaea.
2.5
What is an EEIG?
EEIG’s are provided for under SI No. 191 of 1989 – European Communities (European Economic
Interest Groupings) Regulations 1989 and SI No. 447 of 2010 European Communities (European
Interest Groupings)(Amendment) regulations 2010. It is a mechanism through which business within
the EU can engage in cross-border commerce. The purpose of an EEIG is to facilitate or develop the
economic activities of its members.
An EEIG must have a minimum of two members, who may be companies or natural persons,
from different Member States. The manager of a Grouping may be a natural person or a body
corporate.
On registration, a Grouping shall be a body corporate, have perpetual succession and a common seal
and have legal personality
2.5.1 How can I register an EEIG?
Form IG1 must be completed and lodged together with the contract signed by the members. The
contract should include:
• Name of Grouping
• Official address
• Objects of the Grouping
• Name, business name, legal form, permanent address or registered office, number, and place of
registration, if any, of each member
• The duration of the Grouping, except where indefinite.
3.
Forming a company
3.1 Who may form a company?
The Companies Act generally allows one or more persons to form a private company for any lawful
purpose by subscribing to a constitution. A private company may have a maximum of 149 members
and there is no limit on the number of members of a public company.
3.2 How do I form a company?
You need to send the following documents, together with the registration fee, to the CRO:
• Constitution
This document sets out the conditions upon which the company is granted incorporation. It
must contain provisions dealing with certain matters e.g. the name of the company and, if it is
a company with limited liability, that fact must be also stated. The constitution will not state any
objects if the company is a LTD – private company limited by shares.
This document sets out the rules under which the company proposes to regulate its affairs. Articles
must be printed and divided into paragraphs and numbered consecutively.
The CRO does not provide drafts of the constitution to be used by companies other than
the constitution as described in the Schedules to the Companies Act 2014. Samples of such
documents may be obtained from legal stationers, accountants, solicitors or company formation
agents.
Company Type Constitution format
LTD – Private company limited by shares Schedule 1
DAC – Designated activity company limited by shares Schedule 7
DAC – Designated activity company limited by guarantee Schedule 8
PLC – Public limited company Schedule 9
CLG – Company limited by guarantee Schedule 10
ULC – Private unlimited company having a share capital Schedule 11
PUC – Public unlimited company having a share capital Schedule 12
PULC – Public unlimited company not having a share capital Schedule 13
The text in italics on this page is sourced from cro.ie and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.