Practical considerations when setting up and maintaining a company

January 18, 2012

Catherine Falvey, Manager, Company Secretarial Services, RSM Farrell Grant Sparks

Having made the decision to take the plunge and set up your own business, the next step is to decide which legal entity is the most appropriate for your situation.  We have outlined some practical considerations in setting up and maintaining a company.

There are three options available to you – sole trader, partnership or limited company.

Whilst the sole trader and partnership options are more straightforward to operate and maintain, you may prefer to incorporate a limited company for a variety of reasons, including:

• Access to grant funding;
• Legal name protection over the name of the business;
• Limited liability protection for the shareholders of the business i.e. if the business fails, the shareholders are only liable for the amount, if any, unpaid on the shares for which they have subscribed. 
• A limited liability structure may be more attractive to potential investors;
• The availability of tax incentive schemes for new start-up companies. 

A limited company is a separate legal entity and is formed with a minimum of two directors and one shareholder.  A company secretary is also required.  Form A1 is completed and it must by sworn by a director or the secretary of the company in the presence of a solicitor.  The company must also have Memorandum & Articles of Association which sets out the objects of the company and the rules governing the running of the company. 

All companies must be registered with the Companies Registration Office (‘CRO’).  Careful consideration should be given to the proposed name of the company, as a name will not be permitted when it is deemed to be similar to one already on the Register of Companies.   Registration can take up to 15 working days, but our firm is on a preferential scheme whereby we can have companies formed within 5 working days.  Once the company has been registered, the CRO will issue a Certificate of Incorporation.  This certificate will be required to open a bank account. 

Every company must submit an Annual Return dated 6 months after the date of incorporation.  No accounts are attached to this Annual Return, it is merely a snapshot of the director and shareholder information.

Thereafter, the company must submit an Annual Return every year and this must be accompanied by the relevant financial statements.  It may be possible to avail of an exemption from preparing audited financial statements providing the company satisfies certain criteria.

Every company is allocated an Annual Return Date (‘ARD’), being a date which is the anniversary of the date of the 6 month Annual Return.  It is the responsibility of the directors to ensure that the correct financial statements are prepared and signed for submission to the Companies Office together with the Annual Return within 28 days of the ARD.  Once submitted, this information is a matter of public record. 

Should you have any questions in regard to the above or indeed have queries in relation to company secretarial matters, please contact Catherine Falvey,  Company Secretarial Manager at RSM Farrell Grant Sparks email: catherine.falvey@rsmfgs.ie or phone +353 (0)1 418 2028.

Read more about the accounting and company secretarial services available from RSM Farrell Grant Sparks

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