A company is a legal entity that can protect its owners from personal liability for debts and obligations associated with the business, within limits. The advantages of incorporation are numerous and include taxation, investment and succession planning considerations.
 
Whether you are starting a new business or have been operating for some time, the question arises as to what structure best suits your business and you personally.
 
Below are some of the advantages and disadvantages of opting to incorporate your business into a company.
 
These are guidelines only and you should talk to us for advice to see which structure is best suited to your own business and personal circumstances.
 
Advantages of Limited Company

• Limited liability for directors and shareholders.
• Corporation Tax rate of 12.5% for trading companies.
• Efficient pension funding options for directors.
• Greater access to bank and grant funding although personal guarantees may apply in some cases.
• Raising finance – angel investors and venture capitalists prefer to provide finance to companies.
• Increased succession planning options.
• Start up tax reliefs of up to €40,000 per annum for three years where relevant conditions are satisfied.

 Disadvantages of Limited Company

• Compliance costs related to preparation of audited or audit exempt accounts and related Companies Office returns.
• Smaller companies controlled by less than 5 individuals are subject to a “Close Company Surcharge”. This is a surcharge on undistributed unearned income such as rents and deposit interest.
• Restrictions on the use of company funds by directors & shareholders. All amounts from the Company (other than repayment of loans previously given to the Company) are subject to Tax.
• Company accounts are available to the public via the Companies Office. For small companies, less information is made available.

For more information, please do not hesitate to contact a member of our team;
 
Eoin Lehane: Eoin.lehane@moorestephens.ie
Trevor Leacy: Trevor.leacy@moorestephens.ie
Brian Kearney: Brian.kearney@moorestephens.ie 
Jerry Lordan: Jerry.lordan@moorestephens.ie
Paul Healy: Paul.healy@moorestephens.ie