Separate Legal Entity
A company has its own legal identity, separate from its directors and shareholders.
Business Guide10-minute read
Running a Limited Company in Ireland: A Beginner’s Guide
A practical introduction to company formation, directors, bookkeeping, Corporation Tax, VAT, payroll, dividends and the annual responsibilities of running an Irish limited company.
By GA & Co AccountantsPublished 23 June 2026Updated July 2026
Limited Liability
Shareholder liability is generally limited, although personal guarantees and certain director conduct may create personal exposure.
Ongoing Compliance
Companies must maintain records and meet CRO, Revenue, accounting and payroll obligations.
The Basics
What Is a Limited Company?
A limited company is a business structure with a legal identity that is separate from the individuals who own and manage it.
The company can enter contracts, hold assets, employ staff, receive income, borrow money and incur liabilities in its own name. Its directors manage the company, while its shareholders own it.
A shareholder’s liability is generally limited to the amount unpaid on their shares. However, limited liability does not protect a director from every type of personal exposure. Personal guarantees, unlawful transactions or breaches of directors’ duties may create personal consequences.
The company’s money is not the director’s personal money. Company and personal transactions should be kept separate.
Choosing the Structure
Advantages and Responsibilities
A limited company may provide commercial, legal and tax advantages, but it also creates additional administration and compliance responsibilities.
Potential advantages
- A legal identity separate from the owners
- Generally limited liability for shareholders
- Potentially greater commercial credibility
- Greater flexibility when bringing in shareholders
- Possible tax planning opportunities
- Continuity beyond an individual owner
Additional responsibilities
- CRO filings and annual returns
- Formal accounting records
- Annual financial statements
- Corporation Tax compliance
- Payroll for directors and employees
- Company law duties for directors
Whether incorporation is suitable depends on expected profit, commercial risk, administrative costs, future plans and how the owners need to take money from the business.
Compare with sole trader accountingCompany Formation
How to Form a Limited Company in Ireland
Forming a company involves more than registering a name. The ownership, officers, share structure, registered office and constitution should be considered carefully from the beginning.
Choose the company name
Select a suitable company name and check that it is sufficiently distinguishable from names already registered with the Companies Registration Office.
Appoint the company officers
An Irish private company limited by shares may have one director, but a single-director company must appoint a separate company secretary.
Decide the ownership structure
Choose the shareholders, the number and class of shares to be issued and how ownership will be divided.
Choose the registered office
The company must maintain an official registered office address in Ireland where CRO correspondence and legal notices can be delivered.
Submit the incorporation documents
The company is formed by filing the required incorporation application and constitution with the CRO.
Complete the post-incorporation setup
After incorporation, arrange tax registrations, a business bank account, statutory registers, accounting records and payroll where required.
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View Company Formation ServicesFinancial Separation
Company Money and Bank Accounts
The company should operate through its own business bank account. Customer income should be paid into the company account, and company expenses should normally be paid from that account.
Personal and business spending should not be mixed. Where a director pays a company expense personally, or withdraws company funds, the transaction should be properly recorded in the director’s loan account.
Good financial controls include:
- A dedicated business bank account
- Clear approval of business payments
- Receipts and invoices for transactions
- Regular bank reconciliations
- Accurate director’s loan records
- Controlled access to company funds
Financial Records
Bookkeeping and Annual Compliance
Bookkeeping is the process of recording the company’s sales, purchases, expenses, bank transactions, payroll, assets and liabilities.
Records should be updated regularly rather than waiting until the financial year has ended. Weekly or monthly bookkeeping helps management understand cash flow, profitability, unpaid invoices and upcoming tax liabilities.
Key company obligations
Maintain accurate accounting and bookkeeping records
File an annual return with the Companies Registration Office
Prepare annual financial statements
File the company’s Corporation Tax return
Operate payroll for directors and employees where applicable
File VAT returns where the company is VAT registered
Keep statutory registers and company records up to date
Document important director and shareholder decisions
Missing a CRO annual-return deadline can affect the company’s audit exemption and may result in late filing penalties.
Deductible Costs
Claiming Business Expenses
A company may generally deduct expenses incurred wholly and exclusively for the purposes of its trade, subject to the relevant tax rules and restrictions.
The company should retain invoices, receipts, contracts, mileage records and other supporting documents. Personal or mixed-purpose expenditure requires careful consideration.
Common company expenses
- Accountancy, bookkeeping and professional fees
- Business insurance
- Advertising and marketing
- Software and business subscriptions
- Office rent and business premises costs
- Staff wages and qualifying employment costs
- Business travel and qualifying motor expenses
- Telephone, internet and office costs
- Equipment and qualifying capital expenditure
- Training directly related to the company’s trade
Company Tax
Corporation Tax
An Irish company generally pays Corporation Tax on its taxable profits. The standard rate for qualifying trading income is generally 12.5%.
A 25% rate generally applies to non-trading income, such as rental and investment income, and to income from certain excepted trades.
The taxable profit may differ from the accounting profit because some expenses are disallowed for tax purposes, while capital allowances may be available for qualifying assets.
Trading income
12.5%
Generally applicable to qualifying trading profits.
Non-trading income
25%
Generally applicable to rental, investment and certain other income.
Value-Added Tax
When Must a Company Register for VAT?
VAT registration depends on the company’s taxable activities, turnover, customers and whether it carries out cross-border transactions.
Services threshold
€42,500
The principal domestic threshold for businesses supplying services.
Goods threshold
€85,000
The principal domestic threshold for businesses supplying goods.
A company below the relevant threshold may sometimes register voluntarily. However, registration creates ongoing obligations to charge VAT where applicable, maintain VAT records and file returns.
Different rules can apply to mixed supplies, EU transactions, property, construction, distance sales and businesses receiving services from abroad. Advice should be obtained before relying solely on the general thresholds.
Director and Shareholder Payments
How Can You Take Money From the Company?
A director or shareholder cannot simply treat the company bank account as a personal account. Payments must be recorded and categorised correctly.
1
Salary or director’s remuneration
Salary and director’s remuneration are generally processed through payroll, with PAYE, USC and PRSI applied where relevant. The appropriate salary level depends on the director’s circumstances and the company’s position.
2
Expense reimbursements
A director may be reimbursed for genuine business expenses personally incurred on behalf of the company, provided suitable records and supporting documents are maintained.
3
Dividends
A dividend is a distribution of available after-tax profits to shareholders. Dividends require sufficient distributable reserves and appropriate company documentation. Tax may be withheld and the shareholder may have further personal tax obligations.
4
Repayment of money owed
The company may repay money properly owed to a director, such as funds previously introduced into the business. The director’s loan account should be accurately maintained.
Dividends are not tax-free. Irish companies generally have Dividend Withholding Tax obligations, and the shareholder may have additional Income Tax, USC and PRSI liabilities.
Payroll
What Happens When the Company Employs Someone?
Before paying employees, the company generally needs to be registered as an employer with Revenue and have a suitable payroll process in place.
Payroll must calculate the appropriate PAYE, USC and PRSI deductions using the relevant Revenue Payroll Notification. Payroll information must be reported to Revenue on or before the employee’s payment date.
Payroll setup normally includes:
- Employer registration with Revenue
- Employee personal and payment details
- Revenue Payroll Notifications
- PAYE, USC and PRSI calculations
- Payslips and payroll reports
- Revenue payroll submissions
Common Questions
Limited Company FAQs
Can one person form a limited company in Ireland?
Yes. A private company limited by shares may have one director and one shareholder. However, where the company has only one director, it must appoint a separate company secretary.
Is a limited company legally separate from its owner?
Yes. A limited company is a separate legal entity. Its money and assets belong to the company rather than to its directors or shareholders. Limited liability is not absolute, however, and personal exposure can arise in circumstances such as personal guarantees or certain breaches of directors’ duties.
What Corporation Tax rate applies to an Irish company?
The general Irish Corporation Tax rate for qualifying trading income is 12.5%. A 25% rate generally applies to non-trading income and certain excepted trades. The applicable treatment depends on the nature of the company’s income.
When must a company register for VAT?
The principal domestic thresholds are generally €42,500 for businesses supplying services and €85,000 for businesses supplying goods. Other thresholds and special rules can apply depending on the activity, customers and cross-border transactions.
Can a company director take dividends instead of salary?
A company may pay dividends where sufficient distributable profits exist and the required procedures are followed. Dividends are not tax-free and should not simply replace payroll without considering the company law, tax and social insurance consequences.
Limited Company Accounting
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