Private Limited Company VS Shelf Company?

Shelf Company or Private Limited Company?

When it comes to registering a company in Ireland, there are various options available. Two commonly considered choices are a shelf company and a private limited company. Both options have their advantages and disadvantages, and understanding the differences between them is crucial for making an informed decision. In this article, we will explore the characteristics and implications of both shelf companies and private limited companies in Ireland.

What Is A Shelf Company?

A shelf company, also known as an off-the-shelf company or a ready-made company, is a pre-registered entity that has been incorporated but has remained dormant. These companies are typically created by formation agents or company registration services and are made available for purchase to individuals or entities seeking a quick and convenient way to start a business. Shelf companies have no trading history, assets, or liabilities.

What Is A Private Limited Company?

On the other hand, a private limited company, commonly referred to as an LTD, is a legal entity formed by one or more individuals or corporate entities. A private limited company is a separate legal entity distinct from its shareholders, offering limited liability protection to its members. This means that the shareholders’ personal assets are generally protected in the event of the company’s debts or legal issues.

Advantages of A Shelf Company?

One of the main advantages of acquiring a shelf company is its immediate availability for use. As it is already registered, the process of setting up a business is significantly accelerated. This can be particularly useful for entrepreneurs who wish to start operating quickly or participate in specific business opportunities that require an established entity. Additionally, shelf companies may be perceived as more reputable by potential clients, partners, or investors due to their longer existence.

Advantages of A Private Limited Company?

On the other hand, setting up a private limited company in Ireland involves registering a new entity from scratch. While company registration in Ireland is a relatively simplistic process, this process may take longer compared to purchasing a shelf company, it offers certain advantages. By forming a new company, individuals have the opportunity to tailor the entity to their specific requirements and objectives. This includes choosing a unique company name, defining the company’s structure and shareholding, and establishing the initial directors and officers.

Control and Ownership

Another significant difference between shelf companies and private limited companies lies in the control and ownership of the entity. In a shelf company, the individual or entity that purchases it typically becomes the sole owner and director, assuming full control over the company’s operations and decision-making processes. In contrast, a private limited company allows for multiple shareholders, enabling the distribution of ownership among different individuals or entities. This can be advantageous for attracting investment or involving partners in the business. Furthermore, shelf companies are often viewed as a convenient option for individuals seeking privacy. As the company has no trading history, the identity of the ultimate beneficial owners is not immediately linked to the entity. However, it’s important to note that transparency and disclosure requirements exist in Ireland. Beneficial ownership information must be registered with the Companies Registration Office (CRO) as per legal obligations.

Cost Difference

In terms of cost, acquiring a shelf company may require a higher upfront investment compared to forming a new private limited company. Shelf companies are typically priced based on factors such as their age, reputation, and any additional services provided by the formation agent. Conversely, the cost of establishing a private limited company involves the registration fees and professional fees associated with legal and accounting services. Here at Irish Formations our standard fees for purchasing a ready made company or incorporating a company from scratch are the same.

How We Can Help?

In conclusion, both shelf companies and private limited companies offer distinct advantages and considerations when establishing a business in Ireland. Shelf companies provide a quick and convenient option for immediate use and potential reputation benefits.  However, private limited companies allow for customization and the involvement of multiple shareholders. It is essential to carefully evaluate your specific requirements before making a decision that best suits your business needs.

Here at Irish Formations we are experts on company set up. We offer both private limited company set up and ready to go companies. We offer fully remote company set up with the choice of three packages to choose from. Our team would be more than happy to get you started on the road to incorporation. To talk to a member of the team or to set up an appointment with our Managing Director please contact us on:

Phone: 021 4217322

Email: [email protected]