LLC v Sole Trader for Start Up

PhotogTom

Hi,

Looking for some advice here.

I'm starting up a company and trying to decide whether to start out as LLC or sole trader and convert to LLC "when I get bigger"!

As a business,

1) I'll be entering into contracts with other businesses (it is a service/consultancy oriented business)
2) I'll be VAT registered from the start
3) Initial cash flow will be quite low with no real overheads and no product to buy/stock/sell
4) No employees for the first year or two

Initially, I had thought the Sole Trader route would be fine. Point one above made me think the LLC might make better sense. With relatively low turnover to start, I don't think the tax issues are anything major one way or the other.

What do you think? Am i missing any important questions here?

Thanks!

mneylon

LLC is an American concept.

If you're in Ireland you'll either be a sole trader or go down the limited route

See http://www.cro.ie for details

marley123

You can also look at going down the " umbrella" route - I am working as a contract sales consultant & have an accounting company specialising in contractors handle my invoicing etc... as I am classed as working under their umbrella they also handle my invoicing, paye, vat etc - as far as I am concerned it has been hassle free - they take a set amount in fees every month which takes the stress out of it for me.

ssbob

marley123 wrote: »

You can also look at going down the " umbrella" route - I am working as a contract sales consultant & have an accounting company specialising in contractors handle my invoicing etc... as I am classed as working under their umbrella they also handle my invoicing, paye, vat etc - as far as I am concerned it has been hassle free - they take a set amount in fees every month which takes the stress out of it for me.

You are a sole trader Marley.

PhotogTom

Thanks for the responses. I thought the LLC stood for limited liability company - is that now what you mean by limited as opposed to sole trader.
LLC is just now catching on in America. Inc would be much more common.
Anybody know what the pros/cons are in terms of both legal liability and tax liabilities? Again, keep in mind that I won't be making a lot of profit in the first year.

ssbob

PhotogTom wrote: »

Thanks for the responses. I thought the LLC stood for limited liability company - is that now what you mean by limited as opposed to sole trader.
LLC is just now catching on in America. Inc would be much more common.
Anybody know what the pros/cons are in terms of both legal liability and tax liabilities? Again, keep in mind that I won't be making a lot of profit in the first year.

Well basically Photg, I would ask a few questions first, what area are you going into? This makes a difference.

What I would probably advise you to do would be to start out as a sole trader and then at some stage if you feel you need the protection of a ltd company then you can always move to that afterwards.