Sole Trader vs Company
If you decide to start a business, the first decision you will have to make will be whether to form a company, or trade as a Sole-trader/Partnership (if more than one person).
Registering for Tax
Regardless of whether you start to trade as a company or a sole trader you need to inform the Revenue Commissioners that you have started trading and request a business tax registration number. This is done by sending the appropriate tax registration form to your local revenue office.
Shortly after registration you may receive a visit or you may request a “New Business Visit” visit from a Revenue official to assist you in operating the tax system.
Registration, Deregistration and switching costs
Generally speaking there is very little cost involved in starting and deregistering as a sole-trader.
However, a company may cost €200- €300 to start, and another €200-€300 to deregister with the Companies’ Office.
It is not unusual for people to start off as a sole trader then incorporate the business at a later stage.
Business Name Registration
Registration of a business name is obligatory if any individual or partnership or any body corporate carries on business under a name other than their own true names.
Its purpose is to make public the identities of those individual(s), partnerships or corporate bodies being the legal entity behind the business name.
Specifically, registration of a business name is required if:
- An individual uses a business name which differs in any way from his/her true surname. It makes no difference whether the individual’s first name or initials are added. So registration is required if, for example, Mr. John Murphy traded as Murphy Builders but not if he traded as Murphy or John Murphy).
- A company uses a business name which differs in any way from its full corporate name.
Forms to be completed
To register a business name, submit one of the following forms, along with the registration fee (€40 for paper filing/€20 for electronic filing), to the CRO within one month of adopting the business name:
- Form RBN1: for an individual
- Form RBN1A: for a partnership
- Form RBN1B: for a body corporate
** “At KPW & CO we do not charge our clients (including new clients) for Business Name registration services”
** Client is liable for CRO fee of €20
Certificate of registration – Bank account in trade name
The registrar issues a certificate of registration for each business name registered. A copy of the certificate of registration must be displayed in a conspicuous position:
- In the case of a firm or individual, at the principal place of business and in every branch, office or location where the business is normally operating.
- In the case of a body corporate, at its registered office in the State and in every branch, office or place where the business is normally operating.
- You will need the certificate of registration together with I.D in order to open a bank account in the name you intend trade as. Companies will also require a signed copy of the memorandum and articles of association (see section on company formation).