Register an Unlimited Company
By Wiebke Wolter
The most popular type of company formed in Ireland is a Private Limited Company with share capital. Registering an unlimited company type is becoming more popular. The percentage of Unlimited companies on the register up to the end of 2013 was 2.31%. Almost 87% of other companies on the register had Limited Liability.
For a start, this seems to be consequentially as forming an unlimited company means that there is no limit on the liability of the members in case of debt on insolvency. Even after ceasing to be a member the unlimited liability continues for one year. A pretended limitation of liability can be implemented on a second stage with limited companies as shareholders. Pretended insofar as in case of insolvency of the unlimited company, related companies – like shareholding companies – can be forced to contribute to the debts of the insolvent company. Nevertheless, up to 2013 4,324 businesses in Ireland decided to operate as an unlimited company. Why is this?
Being an unlimited company means that under certain circumstances you enjoy a comfortable confidentiality relief when it comes to your financial statements. That is, unlimited companies are only in those cases obliged to file their accounts where all of the shareholders of the company are:
- Companies limited by shares/guarantee; or
- Themselves unlimited companies that are governed by the law of the EU Member states.
After all this means that most of the unlimited companies in Ireland can keep the state of their financial affairs private as they don’t have to file their accounts at the CRO when they file their annual return (no audit exemptions anyway). Third parties can’t see any accounts at the CRO, thereby getting no access to the company’s cost structure, e.g. earnings, margins, staff salaries. Thus, it is not surprising to find well-known companies like Dunnes Stores and Jonssen Pharmaceuticals among the unlimited companies in Ireland. In 2006, the Irish divisions of Apple decided to re-register from a limited company to an unlimited company, followed by LinkedIn Ireland in 2013.
Registering an Unlimited company in Ireland – though it is risky under circumstances of economic uncertainty – gives you an advantage to your limited liability competitors as you can keep your financial affairs safe to a certain extent.
Irish Formations can guide you through the process of setting up your own unlimited company. Feel free to contact us for further information.