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Changing from Limited Company to Private Company.

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  • 14-06-2012 10:06pm
    #1
    BattleCorp
    Registered Users Posts: 11,788 ✭✭✭✭


    Maybe this is the wrong forum but why would a Limited Company trading for many years change to become a private company.

    Surely this is a very expensive move to make.

    What are the benefits of becoming a private company rather than a Limited company. I would have thought it would have been more risky for the owners of the company to do this?

    Any thoughts?


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    #2
    euroboom13
    Registered Users Posts: 650 ✭✭✭euroboom13


    by going private you dont have to publish accounts.....

    More risky if u are taking on risk or leverage.

    if its to ring fence assets that have no debt its the way to go!!

    no expert but thats my understanding


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    #3
    later12
    Closed Accounts Posts: 11,299 ✭✭✭✭later12


    Do you mean switching to a sole tradership or a partnership?

    It's true the process usually works in the opposite order. I'm not sure if there is a changeover process like there is when switching from being a sole trader to a limited company. I think one may have to close (or leave dormant) the company and then start up a new firm as a private individual.

    Possible reasons for this move would be
    • to avail of less stringent transparency regulations pertaining to accounts and company officers
    • in the event of an end being brought to the firm's activities, it is far easier to wind down a non limited company than it is to wind down an Ltd, particularly in relation to the costs of liquidating a limited company's assets.
    • There may be outstanding liabilities that the limited company is unable to meet which the officers of the company wish to walk away from without walking away from whatever business activity they were engaged in.
    • the costs of running a limited company, particularly in relation to accounting and auditing, are less than those associated with a private company.


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    #4
    andrew
    Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    Whoops, dunno how I missed this one. Moved to The Business Management forum, you might get some more answers there


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    #5
    mathepac
    Banned (with Prison Access) Posts: 4,991 ✭✭✭mathepac


    I wonder does OP mean switch from a public limited company to a privately-owned limited company?


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    #6
    MBateson
    Registered Users Posts: 169 ✭✭MBateson


    mathepac wrote: »
    I wonder does OP mean switch from a public limited company to a privately-owned limited company?

    I presume he means a private unlimited company, the second poster's answer seems right if so


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    #7
    antoinolachtnai
    Registered Users Posts: 9,798 ✭✭✭antoinolachtnai


    When the company is converted into an unlimited company, I understand it is often structured as a subsidiary of an Isle of Man company. This provides the benefits of limited liability without the need to publish accounts.

    See the second section of this Irish Times article - http://www.irishtimes.com/newspaper/ireland/2012/0204/1224311250485.html


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