SOLE TRADE VS LIMITED COMPANY

Not sure what kind of business entity you’d like to register?

If you’re in a start-up phase or you’re just not sure what kind of business entity you’d like to register, always refer to your accountant before making a decision.

If you’re an individual, a professional or trades-person, it may be more cost efficient and easier for you to trade as a self-employed person. You can always upgrade to a limited company after your business has grown. Often businesses start off as sole traders as the benefits of incorporation may not initially outweigh the additional administration and cost of operating as limited company. In this scenario it will be very straight forward to incorporate the business at a later stage.

When you decide to trade as a self employed individual, we shall register a business name for you and register you for all taxes required. We shall assist you with setting up a bank account and recommend solicitors, insurance brokers etc to make the set up process as smooth as possible.

Overview of respective ADVANTAGES of each structure

  • Quick and easy set up;
  • No annual filing requirements with the Companies Registration Office;
  • For tax purposes, losses can be offset against other incomes

  • Limited liabilities. The limited company is considered to be a separate legal entity to you as an individual;
  • Low rates of corporate taxation, 12.5%
  • Potential to raise finance through share issues
  • Increased scope for tax planning, particularly in terms of pension contributions. Funding your pension through a limited company is very tax efficient.

Overview of respective DISADVANTAGES of each structure

  • No protection for your personal assets should the business fail and you become unable to pay your creditors;
  • Profits are taxed at your marginal rate of tax i.e. 51% (PAYE+USC+PRSI)

  • Increased legal responsibilities for directors;
  • Requirement to file annual return and annual accounts with the Companies Registration Office;
  • More paperwork and cost involved in setting up and closing down the business.

Overview of respective ADVANTAGES of each structure

  • Quick and easy set up;
  • No annual filing requirements with the Companies Registration Office;
  • For tax purposes, losses can be offset against other incomes

  • Limited liabilities. The limited company is considered to be a separate legal entity to you as an individual;
  • Low rates of corporate taxation, 12.5%
  • Potential to raise finance through share issues
  • Increased scope for tax planning, particularly in terms of pension contributions. Funding your pension through a limited company is very tax efficient.

Overview of respective DISADVANTAGES of each structure

  • No protection for your personal assets should the business fail and you become unable to pay your creditors;
  • Profits are taxed at your marginal rate of tax i.e. 51% (PAYE+USC+PRSI)

  • Increased legal responsibilities for directors;
  • Requirement to file annual return and annual accounts with the Companies Registration Office;
  • More paperwork and cost involved in setting up and closing down the business.

There are many financial advantages to setting up a company although it’s important to be aware of what the requirements are on all levels including compliance, revenue and also costs. We can advise you on all areas to help you make the best decision possible.

If you decide to set up a company we will file all required documentation to the Company Registration Office (C.R.O) and register you for all taxes required.

We willl assist you with all aspects of setting up your business and establishing effective systems and controls to make the set up process as smooth as possible for you.

Are you looking for professional advice for your business?

REQUEST A QUOTE