Sole trader to Ltd - when

charleville

Hi,

Can anyone advise when would be a good time to make the switch from Sole trader to Ltd company ?

Business is really growing this year and I’m having the best year in a long time so far, At what point would people say (if there’s a general gauge) to make the transition ?

And can I back date any monies made or purchases for the business that I already own.

Sorry if this question has been asked before.

Tks

thegolfer

charleville wrote: »

Hi,

Can anyone advise when would be a good time to make the switch from Sole trader to Ltd company ?

Business is really growing this year and I’m having the best year in a long time so far, At what point would people say (if there’s a general gauge) to make the transition ?

And can I back date any monies made or purchases for the business that I already own.

Sorry if this question has been asked before.

Tks

There are a few points, both from a taxes and liabilities point.

Liability depends on the type of sector you operate in. Are customers likely to sue, or just the general nature Of The industry.

Taxes, if you're profits are over €60k a year, I'd start thinking of a Ltd Co. Reason being you may only require 50 to live off, the additional 10 being taxed at 50% effective rate.

Also Ltd has pension planning better than some traders.

Assess your cash needs from a personal stand point, and project forward.

Companies do cost more compliance wise, not much, but are worth transferring when there is tax saving.