Irish Company Types Explained: LTD, DAC, CLG and PLC

When the Companies Act 2014 came into force, it reshaped Irish company law and introduced a new range of company types. Choosing the right one matters, because the type of company affects who can own it, how many directors it needs, what it is allowed to do and how it is regulated. This article sets out the main company types available in Ireland today and the key features of each.

The LTD is by far the most common company type in Ireland and is the model most small and medium businesses choose. Its name must end with "Limited" or "Teoranta" (or the abbreviations "Ltd." or "Teo.").

An LTD cannot offer its shares to the public or list debt securities on a market.

A DAC is a private company limited by shares or by guarantee that has an objects clause in its constitution. That clause restricts the company to the specific activities listed, which suits certain regulated businesses, special purpose vehicles and companies whose lenders or investors require a defined scope. The name must end with "Designated Activity Company" or "DAC".

• A DAC must have at least two directors.
• Its constitution includes both a memorandum of association and articles of association.
• Unlike an LTD, a DAC can list debt securities on a stock exchange.
• Many credit institutions, insurance undertakings and finance vehicles are required to operate as DACs.

A CLG has no share capital. Instead, each member agrees to contribute a fixed amount, often as little as €1, towards the company's debts if it is wound up. Because there are no shareholders to receive profits, the CLG is the standard structure for charities, sports clubs, management companies, residents' associations and other not-for-profit organisations. Its name must end with "Company Limited by Guarantee" or "CLG", although charities and certain other bodies can apply for an exemption from using the suffix. A CLG must have at least two directors and its constitution includes an objects clause.

A PLC is the only type of company that can offer its shares to the public and have them listed on a stock exchange. With that ability comes a heavier regulatory burden.

• A PLC must have a minimum issued share capital of €25,000, of which at least 25% must be paid up.
• It must have at least two directors.
• It cannot avail of audit exemption and must hold an AGM.
• Its name must end with "Public Limited Company" or "PLC".

Irish law also provides for unlimited companies, where the members' liability for the company's debts has no cap. These include the Private Unlimited Company (ULC), the Public Unlimited Company with a share capital (PUC) and the Public Unlimited Company without a share capital (PULC). Unlimited companies are relatively rare and are mainly used in specific tax or group structures, often because certain unlimited companies are not required to file their financial statements publicly.

Whichever type is chosen, every Irish company must have at least one director resident in the European Economic Area (or a Section 137 bond in place), a company secretary, a registered office in Ireland and a constitution. It must also file an annual return with the Companies Registration Office (CRO), maintain statutory registers, register its beneficial owners with the Register of Beneficial Ownership and register for the relevant taxes with Revenue.

Selecting the wrong company type can lead to unnecessary costs, extra compliance or restrictions that later need to be undone through a conversion or a change of constitution. The LTD suits most trading businesses, while the DAC, CLG and PLC each serve more specific purposes. The decision is best made with a clear view of the company's plans, ownership and funding.