Why Set up an Irish Limited Company?

1. The Number One reason to set up your enterprise as a Company is that it brings Limited Liability.

Essentially this means that the owners of the Company have a limited responsibility for its debts, so the liability of the shareholders is limited to the amount which they have invested in the business.

Why is this such a big deal? Well, if you are a sole trader and your business established liabilities of some sort – unpaid bills due to a downturn in business, a legal claim for personal injury etc, then you are personally liable for all debts accrued. This means that your own personal assets would be used to satisfy the debt. On the other hand if you set up a company, the company would have to pay the debts from the assets held in it’s name. Even if the debts are greater than the assets of the Company, your personal assets are safe.

2. The corporate tax rate of only 12.5% applies to retained profits of the company – significantly lower than the income tax rates which are paid by sole traders and partnerships. There are also a wider range of allowances and tax-deductible costs that can be offset against a company’s profits.

3. A Company Name provide a measure of name protection as no two companies can have a similar name.

4. Certain tax incentives and reliefs can only be claimed by bodies corporate as distinct from individual taxpayers.

5. Investors usually find the formal structure of a company more attractive for the prospect of investment rather than a sole tradership or partnership.

6. Shareholders rights and their relationship in respect to the governance of the Company are usually comprehensively defined in the memorandum and articles of association. Such certainty brings security in dealings between those associated with a Company which does not automatically exist in other entities.

7. A greater degree of business credibility exists in the eyes of customers and suppliers, when they are dealing with an entity which is a limited company.

8. Ownership of a Company can be spread over a number of people.