How to Set Up an Irish Company With a Co-Founder

Agree the ownership before choosing share numbers

Ownership should reflect the founders' commercial agreement, not whichever numbers are easiest to enter. Discuss cash invested, existing intellectual property, future work, customer relationships, risk and whether any ownership is intended to vest over time.

The nominal value of shares is not the business valuation. One founder holding 60 of 100 identical ordinary shares will normally hold 60% of that class even if the nominal amount paid is modest. Share rights, options, future allotments and the shareholders' agreement can affect the wider picture.

• Number and class of shares for each founder.
• Voting, dividend and capital rights.
• Cash, assets and work each person contributes.
• Expected future investment or employee options.
• Transfer, departure and vesting arrangements.

Choose directors and secretary deliberately

Shareholders own the company, while directors manage it and owe duties to the company. The roles can be held by the same founders, but they are legally different. Decide whether both founders will be directors and who will act as company secretary.

An Irish LTD can have one director, but a sole director cannot also be the secretary. With two suitable directors, one may also act as secretary, although the board should still decide who will maintain records and deadlines. The EEA-resident director rule must also be addressed.

Protect intellectual property and founder work

Code, designs, domains, trademarks, content and customer materials created before incorporation do not automatically become company property. Identify what each founder already owns and arrange the necessary assignment or licence to the company with legal advice.

Document confidentiality, invention ownership, time commitment and outside activities. If founders will also be employees or consultants, use appropriate service agreements instead of assuming that the share certificate governs the working relationship.

Plan decisions, deadlock and departures

A 50-50 company can become unable to decide when founders disagree. A shareholders' agreement can set board composition, reserved matters, information rights, funding rules, transfer restrictions, leaver treatment, dispute escalation and exit mechanics.

Generic documents are risky where one founder will work full-time, one contributes an existing product or the founders invest different amounts. Ask a solicitor to align the agreement with the constitution and actual share rights.

Complete ownership records after incorporation

Maintain the register of members, issue share certificates and keep the signed constitution and formation resolutions. The public CRO filing and internal company books should reflect the same ownership from the effective date.

The RBO explains that natural people who own or control more than 25% through shares, voting rights or other means are beneficial owners. In a typical 50-50 company, both founders will require review and usually registration. Changes later may require internal, CRO, RBO and tax updates.