Start-Up Business FAQ
Start-Up & New Business FAQ
Starting a new business, means lots of new challenges and questions. We have outlined the top questions start-up and new businesses have, to help your business journey.
Company Set Up
How Many People Do I need to Set up a Limited Company?
The minimum requirement is 2. Although you are now allowed to set up 1 director companies, the director and company secretary must be different people.
Does the Company Have Separate Tax Number to My Own Personal PPS Number?
Yes, if you set up a limited company, this company must also have a separate tax number. Once the company is setup you can then apply for a tax number from Revenue by filling out the application on ROS.
What Is the Cost of Setting Up A Company?
The cost of setting up a company is approximately €300.
How Long Does It Take to Set Up A Company?
Assuming normal activity, it takes 4-5 business days to get a company set up with the company registration office. It will then take a further 2-3 business days to obtain a tax number for the company.
Should I Invest in Accounting Software?
Yes. As part of compliance with revenue guidelines, all companies and sole traders must maintain good book-keeping and records. There is very cost efficient and excellent software available for €15-€20 per month which can provide real time information.
When Should I Move from A Sole Trader to A Company?
In the majority of cases, it is usually better to set up as a limited company. However, a simple rule of thumb which is effective, is if you assess that the business will make more money than you require as a salary.. In this case it usually makes sense to set up as limited company. However, there are other advantages of a limited company such as limited liability, accumulating profits more tax efficiently, increased pension contributions. It is possible to switch but it is advisable to seek advice from an accountant as it is important that the change is completed in a structured manner, claiming all available business relief to minimise any taxes.
If My Company isn’t Going Well, Is It Difficult to Wind Up?
Depending on what assets and liabilities are left in the business at the time of winding up, the degree of difficulty varies. However, as a first step for any wind up, a company must obtain a “letter of no objection” from revenue. Even the most basic voluntary wind up of a company can take between 16-20 weeks so important to plan it well in advance.
When Do I Need to Register for Tax If I Start A New Business?
Ideally you register before you start trading. Allow yourself 3-5 business days to get everything organised with Revenue.
When Do I Need to Register For VAT?
If you are providing services and you have exceeded sales of €37,500, you must register for VAT. If you are supplying goods and you exceed €75,000, you must register for VAT.
Can I Get Any Tax Reliefs Starting Up A New Business?
Yes, there are some available reliefs. The most common ones that are utilised are; 1. Corporation Tax Start up Relief (possible 3-year exemption from corporation tax). 2. SURE (Start Up Relief for Entrepreneurs). Possible to claim back tax paid in employment over 4 previous years. 3. Research and Development Tax Credit.
If I Don’t Want to Deal with Revenue, Can My Accountant Do This?
Yes, your accountant can act as the tax agent on behalf of the company and you as a sole trader, to ensure all communication is processed through the accountant directly.
Can I Set Up A Company and Still Be An Employee Of Another Company?
Yes, this is possible. However, it is important you analyse your current employment contract to ensure you are not in breach of this. However, from a tax point of view, a person can earn employable income and have other earned income through their own company or sole trader structure.
What Is the Difference Between Income Tax And PAYE?
PAYE is the tax on employable income. If you set up a company or register as sole trader you must register for income tax. It is important to be aware of the filing requirements and the timing deadlines of payment of taxes when you set up a new business. The important date to be considered by business owners is the 31st October each year.
I Would Like to Goffer Shares To My Company To Staff, Is This Possible?
Yes, this is possible and can act as an incentive to employees. However, you should seek guidance on the best way, as a share issue may trigger income tax and CGT for employees.
What Do I Need to Set Up A Company Bank Account?
You will require the company number, the certificate of incorporation and proof of tax registration.
Should I Open a Separate Bank Account for My Business?
Yes, it is always good practice to open a separate company bank account. Even if you are a sole trader, a new company bank account separate to your personal bank account is advisable.
Do Banks Lend Money to Start-Up Companies?
It is possible to get funding from banks, however, in our experience it is very difficult if you cannot display 24 months trading history. Banks will look at previous personal banking history and other business you were involved in if relevant.
I Want to Expand the Business, What Will A Bank Look For Before Lending Me Money?
Banks will perform a thorough examination of the business. However, the first items they analyse are; 1. Last 6 months of bank statements. 2. Last 2 years of certified trading accounts. 3. What are the funds required for. 4. 36–60-month business forecast.
Should I Pay Wages on A Weekly or Monthly Basis?
Obviously, there are some sectors who are traditionally paid weekly. However, where possible we would always advise to set up payroll monthly as it is easier to predict and improves cashflow planning.
Who Should I Contact for Any Potential Grants Available for Start-Up Companies?
We would always recommend new start-ups to register with their Local Enterprise office as there are a variety of grants available for new businesses. As the business progresses, Enterprise Ireland will also become a viable option for potential government investment and support.