Company Formation – The Basics
Getting your business structure right from the start is important, In this post we look at the basic structures of a limited liability company..
What is a company?
A limited liability company is a legal entity registered with the Government. It is widely accepted as the preferred structure for conducting business under. A company carries many advantages with it as well as some legal obligations that company Directors must adhere to.
Limited companies exist in their own right, distinct from the shareholders who own them. This means their finances are clearly separated from the personal finances of their owners.
Shareholders may be individuals or other companies. They are not responsible for the company’s debts (unless they have personally guaranteed a bank loan, for example). However, they may lose the money they have invested in the company if it fails.
Management and raising finance
A director or board of directors make the management decisions.
Finance comes from shareholders, borrowing and retained profits.
Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot.
Records and accounts
Accounts are filed with the CRO.
The directors and secretary are responsible for notifying the CRO of changes in the structure and management of the business.
Profits are usually distributed to shareholders in the form of dividends.
Liability -Shareholders are not personally responsible for the company’s debts, but directors may be asked to guarantee loans to the company.
Choosing a name for your company
Choosing a name for your business is a creative and enjoyable process. It is also one that you need to get right. Customers will deduce a lot from your business name and first impressions count.
While it may be tempting to try to stamp your individual personality on your business name, there are many other issues to consider. Being objective and choosing a name which reflects your business strategy can be more valuable, especially as your business develops.
Creating the right impression
When you are generating ideas about a business name, you initially may want to focus on personal preference. However, an objective approach will enable you to consider the customer first.
Remember that your business name will be the cornerstone of your brand. It should work well wherever you use it – on the phone, in your logo, signage, stationery, advertisements, website, uniforms and any other media you plan to use to reach the market. See our guide on branding: the basics.
Points to help you decide on a name for your business
Do you want the name to reflect what your business does – framing, moving, cleaning, building? Or would something more abstract be suitable?
Would it be a good idea to include your own name?
Do you want a traditional-sounding name, conveying durability and old-fashioned values, or a modern name, suggesting a fresh, innovative approach?
Think about the future – avoid words or phrases that are likely to date quickly.
If you’re likely to be trading overseas, check that the name doesn’t mean anything inappropriate in the relevant languages, and that it can be easily read and pronounced.
Think about callers and customers – avoid very long names, strange wordings and unusual spelling.
Company names – the rules
To make sure your company name is acceptable, work through this list before you send your application to CRO. Ensure that:
your company name ends with limited, or Irish equivalents – this must not be used anywhere other than at the end of the name
the name isn’t offensive
the name isn’t the same as – or very similar to – one already in the register
the name doesn’t include any sensitive words or expressions – unless you have obtained permission to use them