This article is written for aspiring entrepreneurs and business founders in Ireland who are considering starting their own company.
It's particularly suited for those in the early stages of business planning who need to understand the basics of company structures and liability protection.
Key Takeaways:
Limited liability creates a legal separation between personal and business assets, protecting founders' personal wealth if the business fails or faces legal challenges.
The financial risk for company founders is restricted to their initial investment (share capital), meaning personal assets like homes and savings are protected from business creditors.
The concept exists specifically to encourage entrepreneurship and innovation by reducing the personal financial risks associated with starting a business.
The protection isn't absolute - founders can still be personally liable if they provide personal guarantees for loans or engage in fraudulent activities.
It's a legal protection that ensures business owners are only liable for the amount they've invested in their company, protecting their personal assets from business debts and liabilities.
Does limited liability protect me in all situations?
No, you can still be personally liable if you provide personal guarantees for loans or engage in fraudulent activities.
How much can I lose if my limited company fails?
You can only lose what you've invested in the company (your share capital), unless you've given personal guarantees or acted fraudulently.
What's the main advantage of choosing a private limited company structure in Ireland?
The main advantage is the protection of your personal assets through limited liability, which allows you to take business risks without risking your personal wealth.
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