A limited company requires a memorandum – write it with care
You can start up a limited company alone or with other people. A limited liability company is a good form of enterprise especially when there is more than one entrepreneur.
A limited liability company is created when it is registered with the Trade Register. Setting up a limited liability company requires a written memorandum of association, signed by all shareholders. Articles of association are attached to the memorandum, and they must include a minimum of three items of information: company name, place of registered office and line of business. It is recommended to draw up a written shareholder agreement, although it is not mandatory.
The memorandum of association must mention
- the date of the memorandum
- all shareholders
- shares issued by each shareholder
- price per share paid to the company in euros (issue price)
- date for the payment of shares
- members of the board of directors.
If necessary, the CEO, board of directors and auditors must also be mentioned. The financial period must be determined either on the memorandum of association or in the articles of association.
Registering a limited liability company through the YTJ online service costs €275 and in printed form €380 (year 2020).
Additional information regarding the setting up of a limited liability company at YTJ’s website.
If there is more than one founder in the limited liability company, it is recommended to draw up a written shareholder agreement. It is a contractual document that defines the relationships between shareholders as well as their right ans obligations in the company.
The shareholder agreement should be drawn up carefully and with consideration. Changing the agreement after starting the business can be difficult if disagreements arise between you and your business partners. Changing the shareholder agreement always requires a joint agreement between all of the parties.
The shareholder agreement can describe, for example:
- the organization of the company’s operations
- task distribution
- profit distribution
- restrictions to choosing shareholders
- principles for redeeming shares
- prohibition of competition
- the fate of shares in the case of the death of a shareholder
The experts at the Enterprise Agency will assist you in drawing up the shareholder agreement.