Accountancy Ireland

Tax Ireland


East Cork



Ballincollig Online



Working in Partnership with you.


Welcome to Mark O'Keeffe & Company


Congratulations on your decision to start your own business!  Hopefully, with your initiative and the best legal and accounting advice it will prove a very fruitful experience for you.

The law (rather than setting up more red tape for you), should be seen as helping you to identify the framework within which you can operate successfully to be best possible advantage of yourself, your customers, employees and other business allies.

The most important decision to be made firstly is the legal structure within which you wish to operate.  The principal forms of business structure comprise:

  1. Sole Trader.
  2. Partnership.
  3. Private Limited Liability Company.


The simplest form of business structure in Ireland is that of a sole trader.  This is where you would trade on your own account as a self-employed person.  The advantages are that you would remain in full control owning the assets of the business and any profits generated.  There are also very few legal formalities involved.

The significant disadvantage however is that you would be fully personally responsible for all liabilities of the business without any limit.  This means that you could be sued in your personal name by creditors of the company to recover company debts from any of your personal assets including your home.

This is where two or more individuals enter into a business for the purpose of achieving a profit.  The principal advantages here will be the skills which the different partners can bring to the business and also sharing of the responsibilities and liabilities of the business.

You should be very careful as to who is brought in as a partner.  Each partner is individually responsible for all debts of the partnership and you could be very greatly exposed by a reckless partner.  Your personal assets are also at risk for all partnership debts.  It is strongly advisable that a form of Partnership Agreement is drawn up by a Solicitor to make clear the rights and obligations of each partner to minimise any subsequent dispute.  It is surprising how easily difference can arise over issues such as the amount of time each partner devotes to the business, the amount to be paid to each partner, holiday time etc..  It is also important to consider at the very start and reflect in a Partnership Agreement what is to happen if one of the partners becomes ill, wishes to retire or dies.

A company is perhaps the most useful form of business structure.  A company is a separate legal entity to the Shareholders who own it and who form the company by joining together in a Memorandum of Association which sets out the objects of the company and its capital structure.  The Shareholders also sign up to Articles of Association prepared in accordance with the Companies Acts.  The Articles form a contact between the shareholders which specifies how the company is to be governed and in particular details the division of responsibilities between the Shareholders and the Directors who are elected by the Shareholders to manage the Company from day to day.

Every company must have at least two Directors and a Secretary (who could be one of the Directors).  It is now possible for a company to have only one Shareholder.  For the Company to remain a private company it must not have more than 50 Shareholders and may not issue a general invitation to the public to subscribe for shares.

The Company must be registered with the Registrar of Companies and receive a Certificate of Incorporation.  This is essential for the purpose of opening bank accounts and registering with the Taxation Authorities.

The principal advantage of operating your business in the form of a private limited liability company is that it would mean that you and anyone else who joins with you as a Shareholder would enjoy the privilege of limited liability.  This would mean that your obligation to meet the debts of the Company would be restricted to the amount which you have agreed to pay for Shares in the Company.  There are however a number of exceptions to this:

  1. if you agree to sign separately any personal guarantees for debts of the Company (which should be given very careful consideration); or
  2. if as a director you engage in “fraudulent” or “reckless trading” or a range of transactions including entering into loans or property transactions with the company which in effect defraud the Company and its creditors.


A private limited liability company structure where different rights can be attached to different classes of shares is also a useful means of sharing ownership and management duties between a number of people in a legally structured form.  As a company would also have a continuity of existence after your death it can also be a useful structure from a tax planning point of view.
The principal disadvantages of a company structure are that you must comply with clearly defined obligations in Company Law, for example to maintain proper books and accounts, to make various filings in the Companies Registration Office such as on changes to the Directors or share capital of the company.  The company would also be obliged to make Annual Returns to the Companies Office and depending on the size of the Company to file certain accounts.  As indicated above personal liability can also be imposed in certain circumstances.  The directors may also be made personally liable in the event of offenses by the Company in certain circumstances under the Companies Acts and under a broad range of legislation including Health and Safety Legislation and Environmental Protection Legislation.

It is therefore essential to consult with a Solicitor to ensure that the documentation relating to the Company complies with the relevant legislation and also reflects your practical requirements.  It is also advisable if there are a number of Shareholders in the Company to consider entering into a Shareholders Agreement to deal with matters outside the Articles of Association such as an agreement as to the amount of capital to be invested, how shares may be transferred in the event of illness, death or retirement, clarifying the rights and obligations of the various Shareholders as regards the day to day operation of the Company etc…

For example a Shareholder with more than 50% of the voting rights could unless restricted by Shareholders Agreement appoint or remove Directors of the Company, issue further Shares in the Company or declare dividends.  A Shareholder with 75% or more of the voting rights could even change the Memorandum and Articles of Association of the Company or have the Company wound up voluntarily.

This article only gives a broad outline of the different types of company structures and of the duties and obligations which arise from operating a company.  Many different circumstances may arise beyond the scope of this article and it is essential therefore to receive full legal advice not only when setting up the Company but also ongoing legal and accounting check ups.

Each of the structures outlined above would have certain advantages and disadvantages from a taxation point of view and there should also be considered carefully with a qualified advisor to ensure that your personal circumstances are taken into account and the proper balance of risk and benefit achieved.

In any of the structures outlined above it would also be important to consider what form of insurance cover should be put in place from not only a general liability point of view and also as regards life assurance both from a Keyman perspective and for instance to provide funds for the buy out of a deceased partner/shareholders interest.

Your business name will also at times be at your most significant asset and should be carefully safeguarded.  From a legal point of view if as a sole trader/partnership/company you trade under a different name this must be registered with the Registry of business names.

Depending on the nature of your business and how it develops you might have to give legal consideration to registering a trademark or a patent and ensuring that your confidential information is protected.
As outlined in a separate article sooner or later once your business commences, you, your partnership or your company may become an employer.  You should receive proper and detailed legal advice as to your various rights and obligations as an employer under not only, the broad raft of employment legislation, but also significant pieces of legislation such as Safety Health and Welfare at Work Act 1989 which imposes extensive obligations upon you as an employer to ensure for instance the preparation of a safety statement with regard to your place of work.

Before occupying any premises to operate the business whether by purchase, a short term or long term lease you should receive full legal advice with regard to the documentation involved and the rights and obligations arising.

Depending on the nature of your business there are many other legal considerations which might arise in respect of which you should be fully and properly advised.  To name but a few you may encounter issues relating to Planning Regulations, Environmental Law, Competition Law, Product Safety, Data Protection and Consumer Protection Legislation.  Many of these impose criminal penalties which as outlined above may “lift the corporate veil”.  It is not a defence to claim ignorance of the law.

It is essential to obtain proper legal, taxation and accounting advice before concluding the structure of your proposed new business.  It will also be important to obtain proper qualified professional advice from time to time during what will hopefully be many successful years of trading for you.