What should I do after my Sole Tradership or Partnership business has been set up?

By Sinéad Floody, 8th July 2022

Although the process for establishing a sole tradership or partnership business in Ireland is similar, the operation of each is unique. In this blog, we explore the steps that should be taken once a sole trader or a partnership business has been registered.

Sole Traders

If you have recently registered a business name to operate as a sole trader, there are a number of items you need to put in place to give your business the best start. The first being opening a bank account. It is best practise to have a business bank account for the expenses and income that is generated while operating as a sole trader. Your own personal finances should be kept separate from the business. Keeping your business and personal banking separate will be extremely beneficial when making your tax returns and if you are ever audited the process will be much easier and straightforward. This leads us to the next essential step, registering for income tax.

Once your sole tradership is registered for income tax, Revenue will be made aware that you are self employed and they will expect income tax returns from you each year. To help with this element, you should find a Chartered Accountant to manage your accounts and your tax return deadlines. This is another important step. Please let your accountant know if you plan to continue working for an employer while operating you get your Sole Tradership up and running.

If you have not yet registered a sole trader business name you can do so on our website.

It is important to note that operating as a sole trader does not provide limited liability and your personal assets are at risk if your business becomes insolvent. We recommend registering a company with us if you want to have the protection of limited liability. Sole Trader Vs Limited Company

Partnerships

If you have recently registered a business name to operate as a General Partnership (not a Limited Partnership), a business bank account should also be opened for the Partnership. Each partner will need to register for income tax, this will make Revenue aware that the Partnership exists. It is also recommended that the Partnership engage a Chartered Accountant to manage its accounts and any tax registration and returns required.

It is highly recommended that the partners put a Partnership Deed in place. Similar to a shareholder agreement that a company would use, the Partnership Deed outlines the ownership of the Partnership, how it is managed, the duties of the partners, and how intellectual property is dealt with, among many other protective clauses.

If you have not yet registered a Partnership business name you can do so on our website.

It is important to note when operating a Partnership, the partners do not enjoy the protection of limited liability and the partners’ personal assets are at risk if the Partnership becomes insolvent. We recommend registering a company with us if you want to have the protection of limited liability. The benefits of registering a limited company.

If you require assistance with any of the above-mentioned services or if you would like to be referred to an Irish Chartered Accountant, please contact us today or call +353 1 6461625.

Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.