Ireland’s Guide To Money And Living

Grab your destiny by the scruff

Posted November 4th 2010

Brian Morris, principal of Morris Financial, maintains there is huge opportunity in Ireland due to the masses suffering from ‘ostrich syndrome’, which sees their heads buried firmly in the sand. The barriers to entry into business are minimal, there is lots of support available from Enterprise Ireland, rents are falling and there are deals to be done, from website design to the fee for setting up a company with your accountant

If you have a viable business venture then the starting point is whether to incorporate or not. The advantages of forming a company from the first day include:

  • Limited liability: The owner’s liability is limited.
  • Corporate status: Companies like dealing with companies.
  • Longer-term credibility: An established company trading for a number of years carries more confidence than one that is newly-formed.
  • Low tax rates
  • Ability to raise greater sums of capital finance to meet funding needs.
  • Benefits of employment are extended to directors, subject to certain rules

The disadvantages include:

  • Cost of incorporation.
  • Publication of financial statements in the Companies Office (small companies can publish a restricted or abridged version).
  • Compliance with corporate law.
  • Shareholders’ agreement is recommended but can be costly to put in place, while the cost of not putting one in place can be high also.

The advantages of staying as a sole trader or partnership and not forming a company from the first day include:

  • Low cost of set-up.
  • Simplicity.
  • Low compliance costs.
  • No publication of accounts.
  • No compliance with Company Law required.
  • Partnership gives greater capital-raising power than a sole trader (but not as good as a limited company).

The disadvantages include:

  • Unlimited liability: The owner’s liability is not limited.
  • Partnership liability is joint and several on all partners: Partners are responsible for the losses individually and collectively.
  • Some companies may not deal with you.
  • Longer-term credibility takes longer to build: An established company trading for a number of years carries more confidence than one newly-formed.
  • High income tax rates.
  • Difficult to raise adequate finance.
  • Benefits of employment are missing for owners.