Advantages of being a Limited Company in Ireland
There are many Advantages of setting up a Limited Company in Ireland
The main advantages of a limited company in Ireland are limited liability, lower corporation tax rate of 12.5% on profits, and more flexibility for tax and retirement planning
Business Credibility
- Limited company structure projects a business’s credibility and professional image. The “Ltd” or “Limited” designation after the company name signifies that it is a legally registered and recognised entity, which can instil confidence and trust among clients and customers, and potential business partners.
Setting up a Limited Company
- By forming a Limited Company, you establish a separate legal entity distinct from yourself as an individual. This separation allows you to appoint yourself as a Director and Shareholder of the company, giving you control over its operations while maintaining a clear distinction between your personal affairs and those of the business.
Separate Legal Entity
- A limited company is a separate legal entity that can enter into contracts and sue or be sued in its own right.
Access to Funding
- Can raise investment by selling shares and may find it easier to get bank loans and qualify for grants.
Low 12.5% Corporation Tax Rate
- Trading company profits are taxed at 12.5% corporation tax versus income tax rates of 20-40% for sole traders.
- Profits can be retained for reinvestment and startups also get a corporation tax exemption for the first 3 years.
Continuity
- The Limited Company continues to trade irrespective of director, shareholder or management changes.
Tax reliefs and benefits for Directors
- Directors of Limited Companies have access to various tax reliefs and benefits to minimise their personal tax liability that is unavailable to individuals operating as sole traders or in partnerships
Tax Credit for Research and Development
- The R&D tax credit is for Limited Companies in Ireland. It is a value-based incentive encouraging companies to invest in R&D activities in the European Economic Area. If your company fulfils technical requirements, you can claim up to 25% of the cost of R&D expenditure by reducing your Corporation Tax in Ireland.
Options for exit planning and succession
- Operating as a Limited Company provides more flexibility and options for exit planning and succession. It allows for the easy transfer of ownership through the sale or transfer of shares, making it easier to bring in new partners, investors, or successors.
Shareholders’ Liability
- Shareholders’ liability is limited to the amount unpaid on shares if any and personal assets are protected from company debts.