Few question before filing with CRO

steve_

Before i register my business i was hoping you guys could give me some advice and answers. At the moment it is just me and a friend thinking of starting this business. He works full time and is going to provide much of the funding we need at the start, where as i work part time and am going to operate the business during the day. I only work 6-10 shifts so i could potentially work the usual 9-5 shifts for the new business.

My first question is if i was to register as a sole trader could me and my friend still work together on the project?

Being a sole trader does this still allow me to work my 16 hour part time contract?

Do i need to submit accounts straight away? I wouldnt actually be trading for a while yet.

My place of operations is my home. Is there any legal stuff i need to complete in order to allow me to work from home? The business is conducted on the streets not actually in my home, but thats where the stock is kept and where ill doing the administration side of things. Ill be selling stock on a website and delivering the goods myself.

Is a sole trader the proper business structure? Its essentially a delivery service where customers buy stock online and i delivery myself. Operated solely in Dublin, at least for the moment.

Thanks for any help!! Maybe someone could suggest some questions i might be over looking

ssbob

Hi Steve,

It seems to me that you have a few options:
1. Register as a ltd company with both you and your friend as Directors.
2. Register as a partnership(which in effect is two sole traders forming a partnership) You will not have to submit any accounts until next year however you will have to pay preliminary tax on 31/10/2011 if you estimate that you are going to make a profit this year.

You should also consider whether or not you should register for vat.

I would advise that you go see an accountant if you feel that this is going to be a substantial business as more often than not accountants give you free advice to begin with before deciding whether or not to proceed with them.

I hope this helps a bit.

steve_

Heres the thing im not sure about signing the partnership. The business idea was mine and iv put pretty much all the work in. However my partner will put in some money aswell as having a great knowledge of the product we are selling. He was more then happy to allow me to be a sole trader and for him just to take a cut of the profit. Would we still need to register as a partnership if i were just to cut him in on the profits? To be honest although he seems commited at the moment i feel he may lose interest later on. For him its a gamble leaving a full time job for a small self ran business. For me not so much as i can still work my 16 hours and survive on that. Can the business structure be changed later down the line? Ie: swapping from sole trader to LTD or partnership?

ssbob

I understand where you are coming from, however for you to minimise the amount of tax you pay then you can't be a sole trader and just give him some of the profits, but what you can do is set up the partnership based on 70/30 or 80/20 ratio, it doesn't need to be down the middle, also the same can be done when setting up a ltd company, you can own 9 shares and him 1.

He doesn't have to give up work to be part of a partnership, however it will mean that he will have to submit accounts and he will probably be taxed more, but in saying that he may also get a refund of tax in the first year unless you are going to be making lots of money.

In theory yes the business structure can be changed down the line but if you can get it right at the start then thats what you should do.

steve_

I quess when i boils down to it im struggling to work out if i even need to start a partnership. I guess im worried about going it alone. Iv never attempted something like this before and it would be nice to have someone to share the load. But i wonder if its required. I reckon i could go it alone, but if sales started to take off i would defo need someone else.

ssbob

steve_ wrote: »

I quess when i boils down to it im struggling to work out if i even need to start a partnership. I guess im worried about going it alone. Iv never attempted something like this before and it would be nice to have someone to share the load. But i wonder if its required. I reckon i could go it alone, but if sales started to take off i would defo need someone else.

Well Steve from what you said you expect your partner to fade out anyway so if you are going to need help then maybe its not him.

My background is as an accountant, in industry however. I have some clients of my own, one is a PAYE and sole trader worker like you would be on your own and another is in a 50/50 partnership.

I have also recently set up my own ebay business with friend however sales seem to be alot slower than expected.....we are currently trialing with one product and if that goes well we are going to increase our investment.

Would your business be something like that?

steve_

Well the business itself is simple i get stock in which i store at home and do all the deliveries myself. Basically its like a chinese or chipper just without the food :P Ill have a product and ill deliver it. Initial investment isnt huge. Ill need to get a website built which will have to have the function of allowing customers to buy online. This is where the bulk of the money will go initially.

ssbob

Have you considered applying to your local enterprise board for a grant. They would give you advice on your business and the web development aspect of it too. Click on this link:

http://www.501darts.ie/store/

This guy got funded by the westmeath county enterprise board and this is probably something along the lines of what you are looking at?

If you were entitled to a grant then you would need no external funding but even if you didn't get a grant they are a great resource for information.

steve_

Very nice thanks for that ssbob. I have been in contact with my local enterprise board. Im currently waiting to start a start your own business course without. Iv had no previous experience dealing with them but have heard good things. I guess i should ease up for the moment and maybe have a chat with them and see how things go.

ssbob

steve_ wrote: »

Very nice thanks for that ssbob. I have been in contact with my local enterprise board. Im currently waiting to start a start your own business course without. Iv had no previous experience dealing with them but have heard good things. I guess i should ease up for the moment and maybe have a chat with them and see how things go.

No problem, feel free to PM me if you want to run anything by me while setting up your business or looking to expand to the South of the country.

steve_

Thanks allot ill defo be in touch