LTD, DAC, Branch or Subsidiary: Which Irish Structure Do You Need?
A plain-English comparison of Irish company types — LTD, DAC, CLG, PLC — and the branch versus subsidiary decision for overseas businesses entering Ireland.
- Author
- Abbey Blue Formations
- Published
- Reading time
- 8 min read
Most people setting up in Ireland need a private company limited by shares, and the decision takes about ten seconds. But "most" is not "all", and choosing the wrong structure is expensive to unwind.
Two separate questions get muddled here. Which company type applies if you are incorporating an Irish entity. And branch or subsidiary if you are an overseas business establishing a presence in Ireland — a different question entirely, because a branch is not a company at all.
This guide separates them.
Types of Company in Ireland Explained: The Companies Act 2014 Structures
LTD — Private Company Limited by Shares
The default, and the type used by the overwhelming majority of incorporations.
Its defining features:
- No objects clause. An LTD has no memorandum of association stating its objects, and so has full capacity to do anything a natural person could do. It is not confined to a stated purpose.
- One director is permitted. Where a company has only one director, it must have a separate company secretary — the same person cannot hold both roles.
- Maximum 149 members.
- AGMs can be dispensed with. All members entitled to attend and vote may sign a written resolution acknowledging receipt of the financial statements, resolving the matters that would have been dealt with at the AGM and confirming no change in auditor appointment.
- It cannot be a credit institution or an insurance undertaking.
For a founder, a small business, a consultancy or a startup, the LTD is almost always correct. Our Irish company formation service incorporates LTDs as standard.
DAC — Designated Activity Company
A DAC is also a private company, but it retains a memorandum of association specifying its objects — meaning its capacity is limited to the activities set out in its constitution.
Key differences from an LTD:
- A memorandum of association with stated objects.
- At least two directors are required.
- A DAC limited by shares must hold an AGM where it has two or more members.
- Maximum 149 members.
- The name must end in "Designated Activity Company" or "Cuideachta Ghníomhaíochta Ainmnithe" unless exempted. Abbreviations such as "DAC" are not accepted in the constitution.
The DAC exists for situations where a restricted purpose is a feature rather than a limitation. Joint ventures are the classic case: parties who want the vehicle legally confined to the agreed activity. Special purpose vehicles, certain regulated activities and structures where a lender or investor requires the company's capacity to be circumscribed also use DACs.
If nobody is asking you for an object clause, you almost certainly want an LTD.
CLG — Company Limited by Guarantee Ireland
A public company type without share capital. Members' liability is limited to the amount they undertake to contribute to the assets on a winding up, subject to a minimum of €1. At least two directors are required.
Because members are not required to buy shares, this structure suits charities, sports clubs, professional bodies, industry associations and owners' management companies — organisations wanting separate legal personality and limited liability without raising funds from members.
PLC and Unlimited Companies
A PLC can offer shares to the public and must state "Public Limited Company" or "Cuideachta Phoiblí Theoranta" at the end of its name. An unlimited company must state "Unlimited Company" or "Cuideachta Neamhtheoranta"; members have no limitation on liability, a trade-off sometimes accepted for reduced filing obligations. Both are specialist choices.
Entering Ireland From Abroad: Branch or Subsidiary in Ireland?
This is a different decision, and the terms are not interchangeable.
What a branch is
A branch is an extension of the overseas company operating in Ireland. It is not a separate legal entity. The foreign parent contracts, owes and is liable directly — there is no Irish company standing between the parent and its Irish activities.
Under Part 21 of the Companies Act 2014, any company incorporated outside the State that establishes a branch in Ireland must register with the CRO within 30 days of establishing it. Companies from an EEA member state file Form F12; companies from outside the EEA file Form F13.
A branch may cover several places of business under a unified management structure. Places of business without unified management require separate registrations.
What a subsidiary is
A subsidiary is a separate Irish company — typically an LTD — whose shares are owned by the overseas parent. It has its own legal personality, its own limited liability, its own directors, its own filings and its own tax registrations.
Choosing between them
| Branch | Subsidiary | |
|---|---|---|
| Separate legal entity | No | Yes |
| Parent's liability | Direct exposure | Generally limited to its investment |
| Registration | Form F12 or F13, within 30 days | Full incorporation, Form A1 |
| Public filings | Parent company accounts may be disclosable | Irish company's own accounts |
| Perception locally | An overseas company operating here | An Irish company |
A branch tends to suit a short-term or exploratory presence, or a group that wants to avoid establishing a separate entity.
A subsidiary tends to suit anything long-term, anything involving local staff, contracts, credibility or the need to ring-fence liability. It is the more common choice for a reason.
The tax treatment of each differs meaningfully, and that analysis belongs with a tax adviser rather than a formation agent. What we can tell you is the corporate law position and what each route requires at the CRO.
What Actually Drives the Decision
For most people reading this, the honest answer is: incorporate an LTD. It is the default because it fits the overwhelming majority of situations.
Look past it when one of these is true:
- A counterparty specifically requires a stated objects clause → DAC
- You are a not-for-profit or membership body → CLG
- You are an overseas group testing the market briefly → branch
- You are an overseas group building a real Irish presence → subsidiary (LTD)
If you are still deciding whether to incorporate at all, start with sole trader vs limited company in Ireland. If you are overseas and the question is how to get an Irish company incorporated at all, see registering an Irish company as a non-resident.
Frequently Asked Questions
What is the difference between an LTD and a DAC, and which Irish company type should I choose?
The core difference is capacity. An LTD has no objects clause and can therefore do anything a natural person could do; a DAC has a memorandum of association stating its objects and is confined to them. Practically, an LTD can have a single director and can dispense with AGMs by written resolution, while a DAC needs at least two directors and must hold an AGM where it has two or more members. Unless a specific party — a joint venture partner, a lender, a regulator — requires your company's purpose to be legally restricted, the LTD is the right choice and is what the vast majority of Irish companies are.
How do I register a branch in Ireland, or is setting up an Irish subsidiary of a foreign company better?
The decisive question is usually liability. A branch is not a separate legal entity, so the overseas parent is directly exposed to everything the Irish operation does. A subsidiary is a separate Irish company, so exposure is generally limited to the parent's investment in it. Branches suit short-term or exploratory presences; subsidiaries suit anything involving local employment, meaningful contracts or long-term commitment. There are also tax consequences that differ between the two and that should be assessed by a tax adviser before you commit, because switching later means unwinding one structure and building another.
How long do I have to register a branch in Ireland after setting it up?
Thirty days from establishing the branch in the State. The filing is made with the CRO under Part 21 of the Companies Act 2014, using Form F12 if the company is incorporated in an EEA member state and Form F13 if it is incorporated outside the EEA. Note also that a branch registration covers places of business under a unified management structure — if you operate places of business that are not under unified management, separate registrations are required.
Can I convert my LTD to a DAC later, or a branch to a subsidiary?
Conversion between company types is provided for under the Companies Act, so an LTD can become a DAC through the statutory process — but it is a formal exercise involving member resolutions, a new constitution and CRO filings, not an administrative switch. A branch cannot be "converted" into a subsidiary at all: they are fundamentally different things, so you would incorporate a new Irish company and transfer the business to it, with the tax and contractual consequences that implies. This is the main argument for getting the decision right at the outset.
Do I need two directors for an Irish company, or is one enough?
An LTD may have a single director. If it does, it must have a separate company secretary — one person cannot fill both roles. A DAC requires at least two directors, and so does a CLG. Note that this is a different requirement from the EEA-residency rule, which says at least one director must be resident in the European Economic Area or the company must hold a Section 137 bond. A single-director LTD is entirely normal and is a common structure for consultants and owner-managed businesses.
What is a CLG and when would I use one instead of a limited company?
A company limited by guarantee has no share capital, and members' liability is limited to the amount they undertake to contribute if the company is wound up, subject to a minimum of €1. Because members do not buy shares, it suits organisations that want separate legal personality and limited liability but are not raising money from their members — charities, sports clubs, professional and industry bodies, and owners' management companies for apartment developments. If your organisation has profits to distribute to owners, a CLG is the wrong vehicle.
Does the type of company I choose affect my corporation tax rate in Ireland?
Irish corporation tax treatment turns on the nature and source of the income and on residence, not on whether you chose an LTD or a DAC. The branch versus subsidiary decision is the one with genuinely different tax consequences, because a branch is taxed as part of a non-resident company's activity in the State while a subsidiary is a separate Irish company. This is a matter for a tax adviser on your specific facts, and Revenue publishes the underlying guidance.
Do I have to include "Designated Activity Company" in my company name?
Yes, unless an exemption applies. A DAC's name must end with "Designated Activity Company" or "Cuideachta Ghníomhaíochta Ainmnithe", and the abbreviation "DAC" is not accepted in the constitution. An exemption is available where the constitution states that the objects are the promotion of commerce, art, science, education, religion or charity — but a company availing of that exemption must still show its true status on its letters and order forms.
Which company type do most people setting up in Ireland actually use?
The private company limited by shares — the LTD. It is the simplest to operate, permits a single director, has no objects clause restricting what it can do, and can avoid AGMs by written resolution. If you are a founder, contractor, small business or startup and nobody has told you otherwise, this is your answer.