Forming a Private Limited Company

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Forming a Private Limited Company

• Forms of Business Ownership

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What is a Private Limited Company?

• A private limited company is where between one
  and ninety nine people come together and form a
  business
• The owners are called shareholders and they
  invest money in the company
• The profit is divided up among the shareholders
  and distributed in the form of dividends
• Ltd. is written after the name of the company
• The annual accounts are sent to the Registrar of
  Companies. They are not published

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Advantages of a Private Limited Company

• Shareholders have limited liability
• Extra capital is available to fund expansion of
  the business
• Continuity of existence

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Disadvantages of a Private Limited Company

• Costly to set up
• A lot of legal requirements when forming a
  company
• Shares cannot be transferred to the general
  public

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Forming a Private Limited Company
Now the company can begin trading
Promoters
Hire
Certificate of Incorporation
Solicitor
Promoters
Who completes
Sent to
Form A1 Memorandum of Association Articles of
Association
Companies Registration Office (CRO)
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The owners of the company (1-99)
Shareholders
Elect
The people elected to run the company (max. 12)
Board of Directors
Appoint
The MD/CEO runs the company on a daily basis
with the assistance of the department
managers
Managing Director/ Chief Executive Officer



IT Manager
Marketing Manager
Finance Manager
Production Manager
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Forming a Private Limited Company

• You need 1 99 people who invest money and are
  shareholders
• The people involved in forming a company are
  called the promoters
• The promoters employ
• An accountant for financial advice
• A solicitor to prepare the legal documents
  which must be sent to the Companies Registration
  Office (CRO)

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What documents must be filled out?

• Memorandum of Association sets out the
  relationship of the company to the general
  public, i.e. rules and regulations governing how
  the company deals with the public
• Articles of Association sets out the internal
  rules and regulations of the company, e.g.
  shareholders voting rights, how directors are
  elected, powers and duties of the directors
• Form A1 sets out the details of the company,
  its directors and their signatures (Declaration
  of Compliance with the Companies Acts 1963 1990)

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• These documents are sent to the Registrar of
  Companies
• The Registrar will check to see if they are all
  in order
• If so, a Certificate of Incorporation is issued
• This is the birth certificate of a company
• It has a separate legal existence from its owners
• The shareholders have limited liability
• The company can sue and be sued in its own name

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Articles of Association
Memorandum of Association
Form A1
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Board of Directors

• When the company is incorporated it will hold a
  meeting of its shareholders who elect a board of
  directors to run the company on a day-to-day
  basis
• They report to the shareholders annually on the
  performance of the company at the Annual General
  Meeting (AGM)

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Summary

• What is a private limited company?
• How do you know if a business is a private
  limited company?
• Can you list three advantages and three
  disadvantages of operating as a private limited
  company?
• What documents are needed to form a private
  limited company?
• What is the certificate of incorporation?
• What do the board of directors do?
• What is an AGM?