There has never been a more significant time to start a business in Ireland, with the number of excellent programs that target startup businesses starting to grow, as well as the government support small to medium enterprises, are getting from the government.
In this article, we will take a closer look at the steps that are very important when you are planning to start your own business. Let us assume that you are ready to take the big leap; we will take you through some vital steps; from registering your company to deciding what the structure will suit your company.
If you want to know more about this topic, you can check out experts Paul McCarthy – Cork businessman about tips and tricks of the business.
Choose the legal structure that suits your company
Before you charge or issue invoices your customers for the service, business owners need to determine on the structure your company will operate in. The most common option is either to be a limited company or a sole trader. To make the limited company versus single trader decision a lot easier, here are some of the difference, as well as the advantages and disadvantages:
One of the main benefits of becoming a sole trader is that it is the simplest way to set up your company. You can register a business name or use your own name. As a sole trader, you do not need to file yearly annual returns with the CRO or the Companies Registration Office, but you still need to keep your books and records properly, file your taxes to the IRS or the Internal Revenue Services and pay your Value Added Tax if applicable. But there are still some drawbacks.
As a sole trader, you will be liable for all the debts; it means your personal assets will be at risk if there’s a claim against your company. If you choose to be one of them, the tax will also be applied as a personal tax; it can be up 55%.
The most common advantage of a limited company is getting a 12.5% corporate tax rate profits, which can be very favorable to personal tax rates of at least 55% for sole traders, but you need to pay your personal tax on any salary that you draw down from your own company.
You will also have more support. Not like in solo trading, a limited company has a lower liability when it comes to claims credibility as an owner. For example, a limited company that was set up in Ireland will have more startup against your company.
The personal assets of your shareholders or company directors can’t be seized to pay off the debts of the company. You need to remember that setting up a limited company has a lot of steps involved. Not only that, if you are a limited company; you need to remember that it requires more ongoing requirements to keep your company compliant.
If you are planning to be a sole trader, you are required to register your company with the Revenue Commission for taxes and Pay Related Social Insurance purposes as soon as you have decided to start working for your own company, since it can affect your tax situations.
If you plan to have a limited company, your company needs to register your company with the contract research organization first. After that, once your company is incorporated (it takes at least four to five business days), you can now register your company in the Internal Revenue Services for your taxes.
You also need a working bank account in the name of your limited company. Anyone can set up a business under the self-employed sole trading, although for some types of work, your company may need to apply for permission or a license from the county council or your local authority.
The biggest challenge for small to medium enterprise or startup companies is how to balance the cash flow. Usually, clients do not pay on time, leaving the company in a complicated financial situation. If you want to get paid on time, you need to follow up on any outstanding invoices consistently. It is best to follow up at least one week after the due date that was stated in the initial invoice.