There are many factors to consider where and before we begin, I would recommend discussing your particular needs with an accounting or finance professional.
This article might provide some food for thought about what you might wish to learn about.
Before we dig in, there are some key differences:
The main difference is that a Limited Company is a separate legal entity from the individuals involved (Directors and Shareholders) A Limited Company tends to be surrounded with more red tape, however, they are generally the most tax efficient. For example,
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. ‘Paddy Gahan accounting services’ as opposed to just ‘Paddy Gahan’.
The easiest way to describe a sole trader is that your and business are one in the same.
Let me provide some differences:
Advantages of a limited company:
1. Limited liability. This means that the liability of the shareholders is limited to the amount paid for shares. T
2. Low corporation tax. The rate of corporate tax in Ireland is only 12.5% (This may change in the future, so please check!)
3. The business is a separate legal entity from the directors
4. The company name is unique to your business
5. It is very tax efficient
Disadvantages of Limited Company:
1. Compliance. there is more compliance and "red tape" as I mentioned earlier.
2. It is more expensive to maintain a business with the various costs
Advantages of Sole Trader/Partnership:
1. Inexpensive to become established
2. It is quite inexpensive to close the business if required
3. No annual returns to file with CRO
Disadvantages of Sole Trader/Partnership:
1. No Limited liability. Potentially you are liable for all debts
2. All income is taxed as income tax
3. It is not as tax efficient as a limited company
My final piece of advice is, please make sure you are fully aware of all your needs and requirements and please book a free strategy session with me below if you wish.