Set up a Limited Company or as a Sole Trader / Partnership?

by Andrew Lambe, 11th June 2009

This is the million-dollar question! It depends numerous factors such as your type of business, whether you’re still going to be in other employment, likelihood of success, projected turnover, whether you have investors now or in future, whether you want to put profits into a pension, etc.

The best advise we can give is to talk to an Accountant. Preferably a good one! A good Accountant will evaluate your business and give you the pro’s and cons for your type of business. If you want us to put you in touch with a good Accountant in your area please don’t hesitate to contact us. We have a network of contacts around the country whom we work with.

The main difference is that a Limited Company is a separate legal entity from the individuals involved (Directors and Shareholders) A Limited Company needs to make Annual Returns with the Companies Office and there is more compliance and red tape, however they are generally thought to be most tax efficient. For example, Company Directors can put profits into their pensions virtually tax-free (within reason of course!)

If you register as a Sole Trader or a Partnership you will need to register a Business Name if you are carrying out business under a name other than your own e.g. ‘John Smith Carpentry’ as opposed to just ‘John Smith’ You and your business are legally and financially the same person, so you don’t have ‘limited liability’ like you do with a Limited Company.

Should you wish to register your business with Company Bureau, please contact us via our website www.companyformations.ie

Best of luck with your venture and congratulations!