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Private Limited Company - Coggle Diagram
Private Limited Company
Definiton
A business organization owned by one of more shareholders. 4 main types. The rules and regulations of a private limited company are set out in the Companies Act 2014. Under this act there are a number of different types of limited company.
Example: Dyson Ltd
Governing documents
Constitution- Outlines Company name. A statement the company is a private limited company limited by shares. Any other regulations the company wants to include.
Memorandum of Association- External document used to form the company. includes
Company name.
The objectives of company.
Type of liability held by shareholders.
Articles of Association- Internal document outlines internal rules and regulations for running a company. Includes procedures for:
Organising general meetings
Voting at general meetings
Company closure
Finance
Equity finance can be raised by selling shares. The company can also take out loans and receive grants.
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Control/ Decision making
Shareholders appoint a board of directors and a CEO or MD.
Shareholders can influence decision making at meetings.
1 share=1 vote
Formation
A private limited company is formed when one or more investors agree to form the business. It must be registered with the CRO and the Revenue commissioners. A private limited company is more expensive to set up then a sole trader.
1.Document preparation: prepare A1 form and depending on company type, a constitution or a memorandum of Assoiciation.
2.Submission. These documents are sent to the CRO with the appropriate fee.
3.Certificate of incorporation. The Birth cert of a company. the cro examines the documents and if info is correct issues a cert of incorporation. This confirms that business is a legal entity and allows it to begin trading with other firms
Dissolution
Shares can be sold or passed on to another person on the death of a shareholder, has continuity of existence.
The company can be wound up by the agreement of shareholders or by a court order in event of bankruptcy.
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Profits
The board of directs decide on the amount of dividend to be paid to shareholders.
The dividend received by shareholders depends on shares held.
Pay corporation tax@ 12.5%