Share capital for an Irish LTD: what founders should agree

Start with ownership, not a convenient default

Write down the intended owners and what each person believes has been agreed. If one founder expects an equal partnership and another expects a different split, resolve that discussion before the paperwork is prepared. A default number selected in an order form cannot settle a disagreement between founders.

Ask your adviser to explain the proposed share arrangements in ordinary language. Request a short worked example showing what each subscriber will receive, what they must pay and which documents record the agreement. Keep the explanation with the version of the formation brief you approve.

Understand the numbers in a simple example

Imagine a fictional company with 100 ordinary shares, each having a nominal value of €1. If 60 are assigned to one founder and 40 to another, the arithmetic gives 60% and 40% of that single class, with €100 nominal value across the 100 shares.

These numbers illustrate arithmetic only. They are not a recommended capital amount, a valuation, confirmation of voting or distribution rights, or instructions for issuing shares. Different rights and agreements can change what a percentage means in practice. Have the actual documents explained before relying on a similar calculation.

Ask about authorised and issued capital

The CRO’s share-capital guidance explains that an LTD may choose not to state an authorised capital figure. Do not assume that an authorised amount and shares actually issued describe the same thing.

When reviewing the formation documents, ask the presenter to point to each relevant number and explain its purpose. Check whether the service is using a stated limit, which shares are being subscribed for at incorporation and what payment instructions apply. Ask for corrections before you approve a document you do not understand.

Keep funding and personal spending on separate lines

Create a startup-budget sheet alongside the share brief. List the expected setup purchases, operating costs and money available to cover them. Give the accountant a clear account of what each person intends to contribute and ask how those contributions should be recorded.

A €100 figure in our fictional share example does not demonstrate that €100 would fund the venture. Likewise, a founder’s proposed cash contribution should not be silently treated as a share allocation. Record the questions and obtain advice on the actual arrangement.

Use a founder agreement worksheet

• Who is intended to own shares, and are their names and details consistent?
• What number and class of shares has been proposed?
• What rights and payment arrangements need explanation?
• Does anyone expect future investment, employee participation or a later transfer?
• Which decisions require a separate agreement or specialist review?

Use the worksheet as a discussion agenda. Do not circulate it as a signed legal agreement. If future investment is likely, explain that plan before the constitution and initial share structure are finalised.

Think before making later changes

CRO guidance describes notifications and documents for later capital changes, including share allotments. A later change should be planned with the person handling the company’s records and filings, rather than made by editing a spreadsheet alone.

Is nominal capital the company’s valuation?

No valuation is established by the example arithmetic in this guide. Ask an adviser to explain the actual financial and legal terms being proposed.

Does the share split finish the RBO assessment?

Use the beneficial-ownership checklist separately; ownership and control questions can require more detail.