Under Irish VAT legislation, the “Margin Scheme” aims to simplify and reduce the administrative burden and potential double taxation for dealers in second-hand goods, works of art, antiques, and collectibles. Instead of accounting for VAT on the full sales price of goods, the scheme allows VAT to be paid only on the difference (or margin) between the sales and purchase prices. This approach prevents dealers from facing VAT charges on the full value of items they resell, especially when VAT may have already been paid by a previous owner or in a prior transaction.

Categories Covered by the Margin Scheme:

Introduction

The Companies Act 2014 introduced a formal procedure for the voluntary strike-off of companies and clarified the steps for their restoration. There is now a simplified process for restoring companies regardless of the strike-off method.

Key Characteristics:

1. Unlimited Liability of Shareholders: In Unlimited Companies (UC), shareholders have unlimited liability for the company’s debts. This means that if the company faces financial difficulties or is liquidated, shareholders are obligated to cover all debts and liabilities, even using their personal assets. This is in contrast to limited liability structures (such as LTD or PLC), where shareholder risk is limited to the amount they have invested in shares.

Key Characteristics:

1. Shares Traded on the Stock Market: Public Limited Companies (PLCs) are companies whose shares can be freely bought and sold on stock markets. This allows the company to raise capital through public share offerings (IPOs) and attract both large and small investors. The company’s shares become available to the general public, and any investor can become a shareholder.

Key Characteristics:

1. Limited liability for partners:

• The main advantage of an LLP is the protection of the personal assets of the partners. This means that if the partnership faces debts or legal claims, the partners’ personal assets are not subject to seizure (unless partners commit fraud or gross misconduct).

• This is an important distinction from a general partnership, where all partners bear full responsibility for the firm’s debts.

Key Characteristics:

1. Limited Liability by Guarantee: Companies Limited by Guarantee (CLG) are companies where members do not own shares but agree to contribute a specified amount (guarantee) in the event of the company’s liquidation. The guarantee amount is outlined in the company’s governing documents and is typically small. This structure is most often used by organizations that do not seek to make a profit.

Key Characteristics:

1. Designated Activity: A Designated Activity Company (DAC) is a company that must strictly engage in the activities specified in its Constitution. This distinguishes it from other types of companies, such as LTD, where the scope of activities can be more flexible. A DAC is obligated to perform only the activities listed in its governing documents and cannot operate outside those parameters.

Key Characteristics:

1. Limited Liability: In a Private Company Limited by Shares (LTD), shareholders are only liable for the amount they have invested in the company’s shares. This means that personal assets of the shareholders are protected, and they cannot lose more than their investment, even if the company faces financial difficulties.