Limited Company is a separate legal entity to its owners (shareholders).

‍Pros

• As a company owner you are not personally liable for any company debts.
• Trading as a Limited Company can be more tax efficient. You can decide how much salary you wish to earn from the company and the remaining profits of the company are liable to 12.5% corporation tax.
• The company can pay into a personal pension scheme for all employees without the deduction of any PAYE, PRSI and USC.

Cons

• There are more compliance requirements. The company is required to file annual financial statements with the Companies Registration Office and an annual Corporation tax return with the Revenue.

‍Sole trader is owned and run by one person. There is no legal distinction between you and the business.

Pros

• Easy to setup
• Less compliance requirements. You are just required to file an annual Income tax return.

Cons

• You are personally liable for any business debts.
• You as the business owner are liable to income tax on all of the business’ profits.  Therefore, once the business starts making profits over €36,500 it can be more tax efficient to be setup as a Limited Company
• If you pay into a personal pension fund using the businesses profits, you will be required to personally pay PRSI and USC on these pension payments

You are legally required to register your business name with the Companies Registration Office (CRO) if:

1. Your business name differs in any way from its full Limited Company name
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   or
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2. You are an individual, trading as a Sole Trader, and your business name differs in any way from your true surname.

The following individuals need to file an annual Form11 Income tax return;

• Sole traders
• Proprietary director who holds more than 15% or more shareholding in a Limited Company at any point during the year
• Individuals where their main source of income is:
  - Rental income
  - Investment income
  - Foreign income including foreign pensions
  - Maintenance payments
  - Fees that are exempt from PAYE
• A PAYE employee who also earned non PAYE income where the profits are more than €5,000 during the year or total sales was greater than €30,000

You are required to register your business for VAT if:

1. You sell goods and your businesses turnover in any continuous 12 month period is €75,000 or more.
2. You sell services and your businesses turnover in any continuous 12 month period is €37,500 or more.
3. Your business makes acquisitions of €41,000 or more from another EU Member State in any continuous 12 month period
4. You can also opt to register even if your business does not exceed the sales thresholds.

Any business expenses can be claimed if it can be shown that the expense is incurred wholly and exclusively for the purposes of the trade. Depending on the nature of the trade of your business the following expenses may be allowable:

• Purchase of goods for resale
• Employee payroll costs
• Rent and rates for your business premises
• Costs in relation to vehicles or machines that you use in your business
• Professional fees
• Training
• Insurance
• Subscriptions
• Travelling expenses
• Interest payments on borrowed money to finance your business

Changing your accountant is a straight forward process for you. All you need to do is let your current accountant know you are changing accountant and we can take care of the rest.

To set you up as a new client of JMK we will complete the following;

1. Contact your previous accountant and request any required accounting records.
2. Provide an engagement letter for you to sign to avail of our services.
3. Register JMK as your tax agent on Revenue Online System (ROS) so we can file all required tax returns for your business and you personally.

It’s as simple as that.