Accounting Bookkeeping Tax Vat Return Service in Ireland
TAIN Revenue Registered 2009 | Mob: 087 7667436 | Email: rita@ezybookkeeping.ie | © 2010 EzyBookkeeping
FAQ (Frequently asked questions)
Setting up your own business
WHEN starting a new business the big question which all Entrepreneurs will ask themselves is whether to run their business as a sole trader or as a company. There are no hard and fast rules. As a rule of thumb, if you expect your business to earn substantially more money than you will need to live on, then there could be an argument for incorporating the business and ploughing the excess profits into growth and expansion. However, each case will need to be looked at on its merits. Some pros and cons of both options are listed below:
Sole Trader Advantages:
No requirement to file annual accounts (proper books and records must be kept)
Lower legal and compliance costs
Losses can be set against other income (including spouse’s income)
No winding up costs
Disadvantages:
Unlimited Liability
Higher personal rates of taxation on profits
Strict rules regarding deductibility of expenses
Limited Company Advantages:
Limited Liability
Lower tax rate
Tax efficient Pension contributions can be paid by the Company
Trading losses can be carried backwards.
SEED Capital relief may be available (refund of income tax for previous years)
Disadvantages:
Annual accounts need to be filed with CRO
Personal guarantees may be required from lenders
Tax Surcharges on certain undistributed profits
Higher personal tax rates applied to dividends
Restrictions on Loans to directors
Costs of winding up company
There are also important legal and insurance considerations to think about when making the decision. By arranging an initial consultation with your local accountant or Registered Tax Consultant you can get professional advice as to which option will suit your circumstances. In addition, your accountant/registered tax consultant can take care of all your taxation, financial and CRO compliance requirements thereby freeing up your time so that you can focus on growing your business. If you are considering starting out in business for the first time there is also some excellent information available to you on the website of your local County and City Enterprise Board www.enterpriseboards.ie. For all your bookkeeping queries call Rita on 0877667436 or send an email here.
WHEN starting a new business the big question which all Entrepreneurs will ask themselves is whether to run their business as a sole trader or as a company. There are no hard and fast rules. As a rule of thumb, if you expect your business to earn substantially more money than you will need to live on, then there could be an argument for incorporating the business and ploughing the excess profits into growth and expansion. However, each case will need to be looked at on its merits. Some pros and cons of both options are listed below:
Sole Trader Advantages:
No requirement to file annual accounts (proper books and records must be kept)
Lower legal and compliance costs
Losses can be set against other income (including spouse’s income)
No winding up costs
Disadvantages:
Unlimited Liability
Higher personal rates of taxation on profits
Strict rules regarding deductibility of expenses
Limited Company Advantages:
Limited Liability
Lower tax rate
Tax efficient Pension contributions can be paid by the Company
Trading losses can be carried backwards.
SEED Capital relief may be available (refund of income tax for previous years)
Disadvantages:
Annual accounts need to be filed with CRO
Personal guarantees may be required from lenders
Tax Surcharges on certain undistributed profits
Higher personal tax rates applied to dividends
Restrictions on Loans to directors
Costs of winding up company
There are also important legal and insurance considerations to think about when making the decision. By arranging an initial consultation with your local accountant or Registered Tax Consultant you can get professional advice as to which option will suit your circumstances. In addition, your accountant/registered tax consultant can take care of all your taxation, financial and CRO compliance requirements thereby freeing up your time so that you can focus on growing your business. If you are considering starting out in business for the first time there is also some excellent information available to you on the website of your local County and City Enterprise Board www.enterpriseboards.ie. For all your bookkeeping queries call Rita on 0877667436 or send an email here.
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