Contracting Through Your Own Company Registration Ireland
1. What is a limited company?
A limited company is owned by its shareholders, who are allocated a percentage of shares in the
business. The term "limited" refers to the fact that the company's finances are separate from the
personal finances of the owners. Shareholders have ‘limited liability' which means they are liable only
for the amount that they have invested in the company and are not personally responsible for company
debts. However, they may be asked to give a director's guarantee in order to obtain company finance
from a bank or other lender, in which case they may be personally liable for that debt.
As a limited company there are a number of requirements that have to be
The Company must be registered at Companies House.
Annual Accounts and an Annual Return must be filed at Companies House each year.
A return of the Companies Profits must be made to HMRC each year.
Any resulting Corporation Tax must be paid to HMRC within nine months of the Company year end.
PAYE must be operated for anyone employed by the Company, and the company must pay any income
tax and national insurance due to HMRC each month.
2. How do I set up a limited company?
Most accountants will form a limited company for you; however for those contractors who intend to set
up their own Limited Company, we have included the following basic guide outlining the requirements
for registering your company.
Registering your Limited Company.
Before your business can set up as a limited company (or become "incorporated") it needs to be
registered with Companies House. You will need to complete the following documents and return them
to Companies House to complete the incorporation process:
Memorandum of Association – includes information on Company Name, Location and Type of Business.
Articles of Association – These outlines the powers of the Directors and the rights of the shareholders,
Form 10 – Provides details of the Directors' and Company Secretary's Names and Addresses, together
with the Registered Company address,
Form 12 – Simply states that the Company complies with the terms of the Companies Act.
These documents are normally prepared by accountants or formation agents; however there is no legal
requirement to use either. Guidance on all aspects of the registration process, including documentation
required to complete the registration process can be found at the Companies House website.
3. How do I pay myself through a limited company?
The way in which you pay yourself through a limited company depends on the of the individual contract
you are working on. A good accountant who is knowledgeable of the contracting freelancing market
should be able to arrange an IR35 review of your contract.
What if your contract is outside IR35…?
If your contract is outside IR35 then the most tax efficient way to pay yourself will be to take the
traditional route of a low salary (subject to income tax and national insurance) combined with high
dividends which are not subject to national insurance)
As dividends are provided with a "tax credit" there is no additional tax to pay unless your total income
(salary + dividends + interest etc) exceeds the basic rate threshold.
What are dividends?
Dividends are a distribution of the company's ‘after-tax profits' to the shareholders of a limited
company. Any limited company which has generated profits can pay a dividend to its shareholders. Any
dividend paid from a company that is not profitable will be deemed illegal.
After tax profits = Total income / revenue – Expenses (includes your minimal salary) – Company Taxes.
By taking a minimal salary each month you will ensure that the Company Registration Ireland after tax
profits (as your income will be greater than your outgoings), at which point you can then pay yourself a