Starting a Business in Ireland Legal, Accounting, Tax and Banking Issues

Types of Business Sole Trader Sole Trader Partnership Partnership Private Limited Company Private Limited Company Public Limited Company Public Limited Company Co-Ops Co-Ops

Sole Trader You are your own boss, but you are personally liable if anything goes wrong. You are your own boss, but you are personally liable if anything goes wrong. (a) is legally obliged under the Registration of Business Names Act to register the business name under which he/she is said trading name is different to the name of the individual. (Website.ie) (a) is legally obliged under the Registration of Business Names Act to register the business name under which he/she is said trading name is different to the name of the individual. (Website.ie)register the business nameregister the business name (b) is legally obliged to register as a sole trader for taxation & Revenue Commissioners purposes (b) is legally obliged to register as a sole trader for taxation & Revenue Commissioners purposes (c) will be operating his/her business concern with full and total personal liability and responsibility for any and all outstanding debts, fines or other charges and or litigation matters that the business may incur from time to time and or at the time of business closure (c) will be operating his/her business concern with full and total personal liability and responsibility for any and all outstanding debts, fines or other charges and or litigation matters that the business may incur from time to time and or at the time of business closure

Partnership When 2 to 20 people get together. The first thing the partners should do is to write a deed of partnership. This document sets out the rules under which the partnership operates. When 2 to 20 people get together. The first thing the partners should do is to write a deed of partnership. This document sets out the rules under which the partnership operates. Advantages of partnership: Advantages of partnership: It is possible to raise more capital, as there is more than one owner. It is possible to raise more capital, as there is more than one owner. The partners may have different skills, thus improving the effectiveness of the business. The partners may have different skills, thus improving the effectiveness of the business. Problems of partnership: Problems of partnership: Except in the case of a limited partnership, each partner suffers from unlimited liability. Except in the case of a limited partnership, each partner suffers from unlimited liability. Each partner is an agent of the business. A contract negotiated by an individual partner in the name of the business is fully binding on the others. It is therefore essential that partners have trust in each other. Each partner is an agent of the business. A contract negotiated by an individual partner in the name of the business is fully binding on the others. It is therefore essential that partners have trust in each other.

Private Limited Company Limited Company A private limited company is an entity (business) owned by investors (called shareholders) who contribute money to a common fund called the issued share capital. This fund is used to finance the business. Profits made are divided among the shareholders as dividends. Limited Company A private limited company is an entity (business) owned by investors (called shareholders) who contribute money to a common fund called the issued share capital. This fund is used to finance the business. Profits made are divided among the shareholders as dividends.

Limited Company Advantages of a limited company: Advantages of a limited company: The shareholders have limited liability. Their private wealth is protected and they can only lose the value of their original investment. The shareholders have limited liability. Their private wealth is protected and they can only lose the value of their original investment. Ownership and control can be kept separate. The company can employ managers, who have the necessary skills, to run the business. These managers do not have to invest in the company. Ownership and control can be kept separate. The company can employ managers, who have the necessary skills, to run the business. These managers do not have to invest in the company. The company has a separate legal existence; as a result the shareholders cannot be sued because of the actions of the company. The company has a separate legal existence; as a result the shareholders cannot be sued because of the actions of the company.

Limited Company Problems associated with limited companies: Problems associated with limited companies: Legal advice is needed, as the formation process is complex. The formation of companies is governed by the Companies Act Legal advice is needed, as the formation process is complex. The formation of companies is governed by the Companies Act Accounts must be registered (depending on company size) in the companies office which means the public have access to financial information about the company. Accounts must be registered (depending on company size) in the companies office which means the public have access to financial information about the company. Successful companies who wish to expand quicker may opt to 'go public', i.e., become a public limited company (plc) by having their shares quoted on the stock market. Successful companies who wish to expand quicker may opt to 'go public', i.e., become a public limited company (plc) by having their shares quoted on the stock market.

Co Op Co-operatives operate on the basis of people with a common interest who join together for their mutual benefit and they are managed on the principle of 'one person = one vote'. Mainly found in the agricultural sector, some producer co-ops have gone on to expand their businesses via transition to plc. (Example) Kerry Group PLC. Co-operatives operate on the basis of people with a common interest who join together for their mutual benefit and they are managed on the principle of 'one person = one vote'. Mainly found in the agricultural sector, some producer co-ops have gone on to expand their businesses via transition to plc. (Example) Kerry Group PLC.

Legal Requirements Limited Company Limited Company How to start it? – Legal Advice How to start it? – Legal Advice You need a memorandum of association and Articles of association You need a memorandum of association and Articles of association

Accounting Requirements You must file accounts every year You must file accounts every year, within 28 days after 6 months after end of accounting period Company has a birth cert

Tax Issues You must file a corporate tax return after the end of accounting year You must file a corporate tax return after the end of accounting year Each director must file a personal tax return by October 31 st (Form E11) Each director must file a personal tax return by October 31 st (Form E11) Profits taxed at 12.5%, and profits taken out by director taxed as well Profits taxed at 12.5%, and profits taken out by director taxed as well

Bank Issues Get a good value account with low charges Get a good value account with low charges Use a bank that will give you start up advice Use a bank that will give you start up advice Keep an eye on bank charges Keep an eye on bank charges