Constitution of a Private Company Limited by Shares (LTD) Ireland

Under Part 2 of the Companies Act 2014, the LTD is the default Irish company type, and its company constitution is a one-document constitution. There is no separate memorandum and articles of association, the format still used by a DAC, a CLG or a PLC. Section 19 lists what the document must state: the name, the fact that the company is a private company limited by shares registered under Part 2, limited liability, the share capital position, the number of shares (at least one) taken by each subscriber and any supplemental regulations. The LTD has no objects clause, because section 38 gives it full and unlimited capacity to carry on any lawful business.

The constitution is not a shareholders' agreement. It is a public document: the CRO registers it, anyone can obtain a copy, and section 31 makes it binding on the company and every member as if each had signed a covenant to observe it. A shareholders' agreement stays private and binds only its signatories. Many owners use both, with share transfer rules in the company constitution, where they bind future members automatically. Our business templates for Irish companies cover the documents that usually follow incorporation.

A private company limited by shares may have up to 149 members, and section 18 requires it to carry on an activity in the State. Section 19(2) sets the formal rules: the constitution must follow the form in Schedule 1 "or as near to it as circumstances permit", be divided into paragraphs numbered consecutively, and either be signed by each subscriber in the presence of a witness who attests the signature or be authenticated electronically under section 888. You can read the exact wording in the official text of section 19 of the Companies Act 2014 on the Irish Statute Book.

The Act also explains why supplemental regulations matter. Dozens of its provisions are optional provisions, which apply "save to the extent that the company's constitution provides otherwise". The directors' absolute discretion to refuse a share transfer under section 95, the chairperson's casting vote under sections 160 and 187, the board quorum of two and the statutory right of pre-emption on new shares under section 69(6) all fall into this category. A bare Schedule 1 company constitution simply accepts every default, whether or not the members ever read them.

Several rules sit outside the constitution but shape it. Section 26 requires the name to end with "Limited" or "Teoranta". Section 128 allows a single director, but section 129(6) then requires a different person to act as secretary. Under section 137, at least one director must be resident in an EEA state unless the company holds a bond in the prescribed form or a certificate of real and continuous link under section 140. The first directors and secretary are named in the statement filed on Form A1, not in the constitution, and section 25(6) voids any contrary indication in the constitution.

Every new LTD needs a company constitution, so the real question is which version suits your situation. The most frequent case is the single-member company: one founder, one director, a separate secretary, and a constitution that must still deal with a second shareholder arriving later. Two founders who split a business 50/50 face a different problem: the casting vote. If one founder chairs board meetings, the statutory casting vote hands that person the final word on every deadlock, which is rarely what the other founder agreed to.

Families usually want shares to stay among themselves. Parents bringing children in as subscribers, or siblings running a farm or a shop through a company, get that result from a right of first refusal on transfers, and a will from our personal legal documents for Irish families makes clear who inherits the shares. A business planning to hire quickly will also need employment contracts for your first staff.

One edge case deserves a word. If your project is a charity, a sports club or a community group, the LTD is usually the wrong vehicle and a company limited by guarantee fits better, which is what our nonprofit and CLG documents are built for.

The opening paragraphs reproduce Schedule 1 almost word for word: the name with its "Limited" or "Teoranta" ending, registration under Part 2, limited liability and the share capital. You choose between the two forms allowed by section 19(1)(d), either an authorised share capital divided into a stated number of shares, or no ceiling at all with shares of a fixed nominal value. The supplemental regulations then cover interpretation, the directors' authority to allot shares under section 69(1), calls, lien and forfeiture, transmission on death or bankruptcy, dividends under sections 117 and 124, accounts, notices by post and email under section 218, officers' indemnity within the limits of section 235, and winding up.

Shares get the most attention, because that is where small companies fall out. You decide whether existing members keep the statutory right of pre-emption on new shares or whether the directors may issue shares to anyone. You also decide whether to add a right of first refusal on transfers: a selling member must offer the shares to the other members first, at an agreed price or at fair value certified by an independent chartered accountant, with transfers to a spouse, civil partner, children or family trust left outside the procedure. The template disapplies the two-month limit in section 95(1)(b) for transfers that skip that procedure. Arrangements that go beyond these rules, such as vesting or non-compete terms, belong in a separate agreement drawn from our company and commercial documents for Ireland.

Governance closes the document. The directors' clauses set a minimum of one or two directors, restate the EEA residency rule, keep directors appointed by the board in office beyond the next AGM, and let you keep or remove the casting vote. General meetings, electronic participation under section 176A, written resolutions under sections 193 and 194, the single-member procedure in section 196 and the subscribers' declaration with witness or electronic authentication complete the text.

You start with the company name, entered exactly as it will appear on Form A1, then pick the "Limited" or "Teoranta" ending. The next screens ask for the nominal value of each share and whether you want an authorised share capital; if you do, you add the total amount and the number of shares, and the preview rewrites paragraph 4 as you type. From there, the questionnaire turns to the board. You choose a minimum of one or two directors and decide whether the chairperson keeps a casting vote, and the quorum and voting clauses adjust to match.

Two questions then cover share issues and share transfers, each with a short note on what the option changes. After that you state how many subscribers will sign, up to four, and give each one's name, address, description and number of shares, along with the total where there is more than one. The final step asks for the signing date and whether the subscribers will sign on paper before a witness or authenticate electronically through the CRO's online system. Clicking Finish produces the constitution in Word and PDF, ready to sign and file with Form A1. The Irish legal document library lists everything else available for Ireland.

The CRO's checks start with the name, and a name mismatch is a classic ground for a returned application. The name in the constitution must match the name on Form A1 exactly, including the ending and any punctuation, and a reserved name only holds for a limited period. Arithmetic causes the next problem: an authorised share capital of one amount divided into a number of shares that does not multiply back to it. The CRO examiner will spot it. Paper filings add a trap of their own: relying on the typed figure alone. CRO guidance asks each subscriber to write the number of shares taken in his or her own hand, which is why the template leaves a line for it beside each signature.

Governance mistakes surface later and cost more. Founders with a 50/50 split who leave the casting vote in place create a company where whoever chairs the meeting wins every tie. Appointing a sole director who also acts as secretary breaches section 129(6) and is a common reason for a returned application. Many people also assume the constitution appoints the directors. It does not. The first officers come from the Form A1 statement, and later changes go to the CRO on Form B10 within 14 days.