This article is for Irish entrepreneurs and business owners who need to choose between an LTD and DAC company structure but aren't sure which one fits their needs.If you're wondering what the actual differences are, which structure makes sense for your business, or whether you're overthinking this decision, this guide covers the key distinctions, compliance requirements, and a simple decision framework to help you choose.
## Key Takeaways- Choose an LTD for most businesses—it's simpler, allows one director, and lets you pivot without constitutional amendments.- DACs require restricted objects clauses that limit activities and need special resolutions plus CRO filings to change business direction.- Financial services, regulated entities, and foreign subsidiaries typically need DACs; standard commercial businesses should use LTDs.- DACs must have two directors minimum and follow more prescriptive governance rules, creating ongoing administrative burden and costs.- You can convert between LTD and DAC later if needed, so start simple rather than choosing complexity unnecessarily.
## Frequently Asked Questions### Should I choose an LTD or DAC for my new business?For most businesses, choose a private company limited by shares (LTD). It's simpler, more flexible, and has fewer compliance obligations than a DAC. Unless you have a specific reason like being in financial services or needing restricted objects for a joint venture, an LTD is the right choice.### What's the main difference between an LTD and a DAC?The critical difference is the objects clause. An LTD can engage in any lawful activity without restrictions, while a DAC's constitution must specify what activities the company can do. If you want to change what a DAC does, you need 75% shareholder approval, constitutional amendments, and CRO filing—whereas an LTD can pivot freely.### Can I run my company with just myself as the only director?Yes, if you choose an LTD structure—it allows single-director companies. However, a DAC requires a minimum of two directors, so if you're a solo founder, an LTD is your only option.### When would I actually need a DAC instead of an LTD?You'd need a DAC if you're in financial services (banks, insurance, credit unions), if you're a subsidiary of a foreign company with group policies requiring it, or if you're forming a joint venture where partners want restricted objects for control. Some investors or contracts may also specifically require a DAC structure, though this is rare.### Does choosing a DAC make my company look more professional to investors?No, investors care about your business model, traction, and team—not your company structure. Many investors actually prefer the flexibility of an LTD structure. Choosing unnecessary complexity doesn't impress anyone and just creates extra administrative work.### What are the ongoing cost differences between an LTD and a DAC?While both cost €50 in CRO fees at incorporation, DACs have higher ongoing costs due to compliance complexity. Every DAC amendment requires special resolutions and CRO filings (€50+ each time), and you'll likely face higher accounting and legal fees. Over 5-10 years, these extra compliance costs can add up to thousands in unnecessary fees.### Can I convert my LTD to a DAC later if I need to?Yes, you can convert between structures through a process called re-registration. Converting requires a special resolution, new constitutional documents, CRO filing, and sometimes court approval, typically costing €500-1,500. Since you can always convert later if circumstances change, there's no reason to start with the more complex DAC structure "just in case."### What happens if I want to change my business direction with a DAC?If your DAC wants to operate outside its stated objects, you must pass a special resolution with 75% shareholder approval, amend your constitution, file changes with the CRO, and wait for approval. With an LTD, you can simply pivot to a new business direction without any constitutional changes or CRO filings—you just do it.
