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The Right Business Structure

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  • 23-05-2006 2:13pm
    #1
    di11on
    Registered Users Posts: 1,262 ✭✭✭


    A friend of mine has been very successfully selling over eBay. She wants to expand and make a proper business out of it and I am currently setting up a website for her.

    Going forward, what is the optimal business structure for a small online retail business? Starting out, turnover shouldn't be more than €2000 per month.

    It would seem to me that the administrative burden of running a company (meetings etc.) is a little too onerous for a business this size. At the same time, trading as a sole trader is going to make it difficult to get a merchant account and won't look as professional.

    I'm thinking the best balance would be a Limited Liability Partnership. It's a UK based operation, I presume the laws aren't too different here and in the UK.

    Does anyone have any experience or advice to offer in this regard?

    Many thanks,

    Di11on


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    #2
    kluivert
    Registered Users Posts: 2,399 ✭✭✭kluivert


    A partnership really only applies to business that would have a practice. eg accountants, solictors, vets, doctors etc.

    Company limited by shares would be sufficent for your her.


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    #3
    Catney
    Closed Accounts Posts: 48 ✭Catney


    di11on wrote:
    A friend of mine has been very successfully selling over eBay. She wants to expand and make a proper business out of it and I am currently setting up a website for her.

    Going forward, what is the optimal business structure for a small online retail business? Starting out, turnover shouldn't be more than €2000 per month.

    It would seem to me that the administrative burden of running a company (meetings etc.) is a little too onerous for a business this size. At the same time, trading as a sole trader is going to make it difficult to get a merchant account and won't look as professional.

    I'm thinking the best balance would be a Limited Liability Partnership. It's a UK based operation, I presume the laws aren't too different here and in the UK.

    Does anyone have any experience or advice to offer in this regard?

    Many thanks,

    Di11on

    Well if you want to register it as a limited liability co. you will need two directors and a secretary (who can be one of the directors). So someone else would need to say they are a director and while this is a legal formality, ie they dont actually have to do anything, or be paid, they do take on the risk of being a director should things go wrong. You dont say if you are a willing paid partner, or simply setting up the website?


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    #4
    kluivert
    Registered Users Posts: 2,399 ✭✭✭kluivert


    In Ireland you can have a single member company when you fill in M1 form from the CRO.


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    #5
    Ancient1
    Registered Users Posts: 2,592 ✭✭✭Ancient1


    di11on wrote:
    At the same time, trading as a sole trader is going to make it difficult to get a merchant account and won't look as professional.

    Why do you reckon it would be difficult for a sole trader to get a merchant account?


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    #6
    antoinolachtnai
    Registered Users Posts: 9,787 ✭✭✭antoinolachtnai


    An LLP is going to have the same burdens as an LLC. There are complex legal reasons why certain types of professionals use LLPs rather than LLCs.

    I would suggest an LLC if at all possible, but sole trader would be fine too, if there is only one participant and no plan to raise outside capital.


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