In the month of June 2015, the vast majority of Ireland Companies Act 2014 came into force replacing the previous Irish company law regime. Under this, the law governing unlimited companies has, to a great extent, been carried over to a new regime, although there have been a number of significant changes. Even though the principle method of carrying business in Ireland is through a private company limited by shares, the annual statistics show that there has been a steady but slow bend towards forming Unlimited Company.
What is an Unlimited Company?
According to Section 5 (2) (c) of the Companies Act of 1953 defines an unlimited company as “a company which does not have any limit on the liability of its members”. Should the company ever enter an involuntary liquidation, its members are liable on an unlimited basis for any debts of the company that cannot be discharged from the company’s assets. The Companies Act in Ireland currently permits three types of unlimited companies, they are-
- The private unlimited company having a share capital
- The public unlimited company with share capital, and
- The public unlimited company without a share capital
Features of an Unlimited Company
- The absence of limited liability protection to its members in an unlimited company
- The registered name of all the unlimited companies must end with the words “Unlimited Company” or an Irish equivalent “Cuideachta Neamhtheoranta” or “UC”
- An unlimited company must have a minimum of two directors
- One of the directors can also serve as a company secretary for the company
- UCs will have a two-document constitution, consisting of a memorandum and articles of association
- An audit exemption is available to the unlimited companies
How to Form an Unlimited Company in Ireland?
An unlimited company is formed in the same as any other company in Ireland, i.e. by submitting the CRO. The process is simple and straight-forward. The steps for starting a business in Ireland are as follows.
- Fill the application form A1 and attach all the required documents to it. Also, the form must be signed by the directors, secretary, and the initial members of the company
- Draft the constitution (articles and memorandum of association) by mentioning all the details of the members of the company and the company. The proposed constitution of the company must be signed by or on behalf of the initial members
- After which you must have to pay the company registration filing fees to the authorities
Once every document is scrutinized and all goes well, your application will be approved. An unlimited company can typically be formed within five working days of filing the application at the CRO.
Documents Required to Form an Unlimited Company
- An application Form A1 of company registration
- Drafted constitution of the company
- Drafted minutes of the inaugural meeting of the directors
- Share certificates of the company
- Certificate of name registration
Re-registration of a Limited Company to Unlimited Company
A Limited Company in Ireland can be re-registered to an Unlimited Company. All it requires you to do is unanimous consent of all the members of the company and a special resolution.
After which a re-registration form D6 must be filled and signed by all the directors, secretary, and the company members. It must be furthers accompanied by a copy of companies audited financial statements covering a period that ends not more than three months before that date of application to re-register.
The re-registration of a limited liability company as an unlimited company and the related changes to the company's name and constitution take effect on the issue of the certificate of incorporation on re-registration. Following the re-registration, the company will, among other things, need to alter its name displayed at its registered office and other places of business, on its headed notepaper and other documents and adopt a new company seal with its new company name.
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