Changing from Sole Trader to Ltd. Company

CapedCrusader

Hi folks,

If you have a number of trading names under which you do business and want to switch from a sole trader to a ltd company and want to continue doing business under those names, how is this done.

I.e. you are changing from Joe Bloggs trading as Pot Holes for Sale to Joe Bloggs Trading Ltd. trading as Pot Holes for Sale.

How do you do this?

Cheers folks

kenbrady

CapedCrusader wrote: »

Hi folks,

If you have a number of trading names under which you do business and want to switch from a sole trader to a ltd company and want to continue doing business under those names, how is this done.

I.e. you are changing from Joe Bloggs trading as Pot Holes for Sale to Joe Bloggs Trading Ltd. trading as Pot Holes for Sale.

How do you do this?

Cheers folks

1. Open a web browser

2. Go to the cro site www.cro.ie

3. Click on the 'Post Registration' link in the top navy navigation bar

4. Click on the 'Business Name' link on the navigation bar

5. On that page look in the text for where it says 'Change in ownership of a business name'

CompanyBureau

Basically what you need to do is do a cessation of business name form for each name, and then re-register the business names under your new limited company. If you go to CORE.ie you can do these forms yourself, and also when your limited company is formed you can go back to this website and re-register the names. Make sure you Accountant does closing accounts if you are switching from Sole trader to Limited Company. Let me know or pm me if you need any assistance with registering the company. Good luck!

Skylined

Hey guys,

I'm trading as a sole trader, have been for 6 years. I branched into a new service 12 months ago and am expanding it. I intend to set up a ltd company for this new business. I intend to make use of Brian Lenihans extension on tax relief for new companys section 31 Finance(No.2) Act 2008.

Does anybody have experience of this?

Can existing sole trading business be incorporated and qualify for the relief?

All views welcome.

Only new to boards, so just getting the hang of it .

Cheers Guys

dbran

Hi Skylined

You will be able to take advantage if you are a NEW BUSINESS activity and setting up as a limited company. There are complex calculations which are required if the company also carries on an existing business to divide up the taxable and non taxable profits.

You should also note that the relief does not apply to companies which under close company legislation, would be classified as carrying out professional services. This would be things such as architects, engineers, solicitors etc.

In practical terms the relief is of limited use as even though you will not have any CT to pay, you will not be exempt from personal income tax. So in order to get the money out you will have to pay yourself a salary (PAYE/PRSE), or a dividend (Income tax). This defeats the whole benifit of the relief. The relief would only be of real use to large or mutinational corporations setting up here.

In short, do not set up a limited company if the sole reason for doing so is to avail of this relief.

Dbran

wishful thinker

Skylined wrote: »

Hey guys,

I'm trading as a sole trader, have been for 6 years. I branched into a new service 12 months ago and am expanding it. I intend to set up a ltd company for this new business. I intend to make use of Brian Lenihans extension on tax relief for new companys section 31 Finance(No.2) Act 2008.

Does anybody have experience of this?

Can existing sole trading business be incorporated and qualify for the relief?

All views welcome.

Only new to boards, so just getting the hang of it .

Cheers Guys

Just had to tell a client with same thoughts as you. Basically if you are a existing ST business that is looking at incorporating then you will not be able to claim the corporation tax exemption (Section 486C TCA 97).

If you have a new type of business/service, you could possibly argue with revenue that this is a new service and the new company solely relates to the new service.

Revenue are getting very sticky with grey areas of debate and if you appeal (as you are entitled to) the findings are genreally in favour of Revenue.

Skylined

Cheers dbran and wishful thinker

Its good to get another view on this, I will definetly follow it with the new business. A little more research.

As you mentioned dbran

"This defeats the whole benifit of the relief. The relief would only be of real use to large or mutinational corporations setting up here."

It is quiet funny you said that, Was with a client in a small factory in a rural town in west and Koreans had just taken a large unit beside him, moving in on Monday to make energy saving bulbs. . . . .

Cheers again guys

CompanyBureau

Yes in reality this incentive is another smokescreen by our government. It appears to us that very few new companies meet the strict conditions as laid down the provisions of the finance act. It doesn't apply to existing businesses or 'service company's' which rules out probably 90% of our clients. I'm not 100% on the closed company legislation, but I think it means a company with 5 people or less involved? Maybe the tax advisors here can confirm this?

dbran

CompanyBureau wrote: »

Yes in reality this incentive is another smokescreen by our government. It appears to us that very few new companies meet the strict conditions as laid down the provisions of the finance act. It doesn't apply to existing businesses or 'service company's' which rules out probably 90% of our clients. I'm not 100% on the closed company legislation, but I think it means a company with 5 people or less involved? Maybe the tax advisors here can confirm this?

Hi

I believe being a close company by itself dose not rule out eligibility. It is being a close company engaged in "professional" services which will be the issue. Again not all service companies are engaged in "professional" services. If you search revenue.ie you will get full info regarding this exemption

Kind Regards

dbran