Starting your own business
If you are thinking of starting a business there are a number of issues you need to consider. Different supports and regulations apply, depending on your particular situation. You may be employed, unemployed or someone who is coming from outside Ireland to set up a business. This document highlights some of the important information you need to know with links to relevant topics.
The website selfemployedsupports.ie has information on the services and entitlements available if you are self-employed and setting up a business.
Legal structures
You can set up a business as a sole trader, as a partnership or as a limited company. The type of structure you choose depends on the kind of business you are running, with whom you will be doing business and your attitude to risk. It is advisable to get the advice of a solicitor or accountant when considering the structure for your business. Businessregulation.ie is a portal to help you identify the main regulations which affect your business.
Sole trader: It is relatively simple to set up as a sole trader but if your business fails, your personal assets could be used to pay your creditors. Your main legal obligation is that you must register as a self-employed person with the Revenue Commissioners (see ‘Tax and PRSI’ below). If you wish to use a business name you must register your business name with the Companies Registration Office.
Partnership: This is where 2 or more people agree to run a business in partnership with each other. The partnership agreement should be drawn up by a solicitor. The partners are jointly responsible for running the business and if it fails all partners are jointly responsible for the debt.
Limited company: If you set up your business as a limited company, the business is a separate legal entity. If the company gets into debt, the creditors generally only have a claim on the assets of the company. The company must be registered with the Companies Registration Office (CRO) and the company reports and accounts must be returned to the CRO each year.
There is more information about these different structures on the CRO website. You can register your business name and file company returns online with the CRO using CORE (Companies Online Registration Environment).
Business plan and funding
City and County Enterprise Boards provide supports to local businesses that are starting up or in development. Their role is to develop indigenous enterprise potential, to stimulate economic activity at local level and to promote microenterprises (10 or fewer employees). You can find information about their seminars and start your own business courses as well as mentoring and financial supports on enterpriseboards.ie.
As part of the Action Plan for Jobs (see below), Microfinance Ireland is providing loans of up to €25,000 to small businesses with no more than 10 employees, including sole traders and start-ups. The loans will be for commercially viable proposals that have been refused credit by the banks. The Fund is open for applications from 1 October 2012. Details of how to apply and forms are available on microfinance.ie, enterpriseboards.ie and from your local City or County Enterprise Board.
Chambers Ireland and the Irish Banking Federation (IBF) have developed a website, smallbusinessfinance.ie, for small businesses looking for information about financing or funding their business. The information is aimed at a range of businesses including start-ups, established businesses seeking to expand or innovate, businesses entering export markets and businesses with financial difficulties.
The Government has set AIB and Bank of Ireland targets of €3.5 billion each in 2012 and €4 billion each in 2013 for loans to small and medium enterprises (SMEs).
Tax
How your business is taxed depends on whether it is incorporated as a company. If it is a company then it is liable for corporation tax. If your business is not incorporated you are considered to be a sole trader and you pay tax under the self-assessment system. Further information on tax is available onselfemployedsupports.ie and in the Revenue booklet IT48 Starting in Business (pdf).
Start-up companies: New companies may get tax relief on the first 3 years of corporation tax and the value of the relief will be linked to the amount of employers’ PRSI paid by a company in an accounting period subject to a maximum of €5,000 per employee. In the Finance Act 2012 this tax relief has been extended to companies that commence trading in 2012, 2013 and 2014.
Professional services
Our E.C.U.B.S. member directory has a host of professional services which may be useful for you if your are starting up your own business or need professional services in your current business.
We have members who are experts in their field including accountants, solicitors, web designers, graphic designers, printers and much more. Why not check out our members directory for a host of professional services to help support your new business or keep your current business on the right rack.
PRSI
If you are self-employed you pay Class S social insurance contributions. There is a guide PRSI for the Self-Employed - SW74 on the website of the Department of Social Protection. If you are an employer and you create new and additional jobs in 2012 you may qualify for an exemption of employer’s PRSI for those jobs.