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Sole trader to Limited Company

  • 16-05-2004 2:31pm
    #1
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭


    That are the formalities in converting from being a sole trader to a Ltd company?

    I know that you need to form a company etc. But in respect to the day to day operations is the transition seemless?


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    It very much depends on the type of business - if you are running a corner shop, then effectively there is no problem. However, if you have ongoing contracts, those contracts are currently with you personally - the company is a separate legal person.

    You might need an accountant to sort out any outstanding debtors / creditors and how they are handled.


  • #3
    Pataman
    Registered Users, Registered Users 2 Posts: 1,543 ✭✭✭Pataman


    Your accountant will also charge you more as there are more books to be certified. However the tax rate is 12.5%, so there may be a saving.


  • #4
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭Victor


    Originally posted by Pataman
    However the tax rate is 12.5%, so there may be a saving.
    If you mean Corporation Tax, it doesn't kick in until €"big money" and in any case income tax is payable.


  • #5
    ur mentor
    Registered Users, Registered Users 2 Posts: 237 ✭✭ur mentor


    It will be different. Invoice, correspondance need to state Ltd. you will need to list directors names on letterheads and co reg nos. There are a good few legal obligations in terms of accounts, filing, revenue returns- now separate from your personal returns. wise to have separate bank accounts. personal pension transfer can be interesting also. Finally you get to pay tax on co profits and then pay tax again when you take a salary.
    sure you need a limited liability co?:cool:


  • #6
    trap4
    Banned (with Prison Access) Posts: 468 ✭✭trap4


    I'd think long and hard about converting to a Limited company if I was you!

    That's because I setup Limited company myself 3 years ago with too little knowledge of what's involved. The paperwork is a huge PITA and my accountant is constantly whinging about the ridiculous amount of red tape now involved.

    I did a (belated) start your own business course with my County Enterprise board last year and the accountant delivering the course said that he would advise most of us not to even consider becoming a Limited company because of the 'frightening' amount of regulation.

    Hope that doesn't scare you too much. Of course there are some advantages and it all depends on your own particular circumstances and business but you just need to be careful that you know what you're getting yourself in for. Best of luck!

    ~~~~~~~~~~~~~~~~
    -Jim
    http://eirepreneur.blogs.com


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