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Partnership or Limited Company

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  • 17-01-2008 2:36am
    #1
    ve
    Closed Accounts Posts: 448 ✭✭


    My girlfriend (of many years) and I plan on going in to business this year. The domain is in IT, initially as a service provider, and may branch in to product development later on (toying with the idea at the moment). So we are basically a 2 person team, with no intentions of hiring until things take off (please god).

    A work colleague recommends that we go the whole way and register a Ltd company and register for VAT, etc right off the bat. At the same time he says that it's more paperwork to start up, and more exensive to take down if needs arise. He also says that we would benefit from going down the Ltd company route as it appears much more professional and could win us more contracts when dealing with larger businesses. I know what it feels like to be appearing unprofessional because at the moment we have had to turn down qutie a few contracts simply because we are both still in our current jobs (departing in near future) and can only do work for our business on the side (right now). Now our turnover from this "on the side" venture would be well below the threshold for VAT registration, but if we took on the work, we could very well surpass it.

    We will also be operating from a home office. I know this may be a silly question but are there any issues with regards operating a business (partnership or limited company) from a residential property? (it's not rented, btw).

    What basically would be the pro's and con's of going either way. At the moment we're swaying towards Limited company.


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    #2
    antoinolachtnai
    Registered Users Posts: 9,796 ✭✭✭antoinolachtnai


    You don't have to register for VAT just because you are a limited company.

    If you are going to do business with other businesses, rather than the general public, you are really going to have to register for VAT.

    I would advise you not to enter a partnership arrangement with anybody. It is legally very problematic. The reason is that you both become liable for the other's actions in respect of the business, and there is no limit to the liability. This could become problematic if you ever break up as romantic partners but need to keep the business going.

    The costs of sorting out a partnership at the end, particularly if you don't have a written partnership agreement at the start will be very substantial.

    Register as a limited company. That's what I say.


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    #3
    keefg
    Registered Users Posts: 3,187 ✭✭✭keefg


    antoinolachtnai wrote: »

    If you are going to do business with other businesses, rather than the general public, you are really going to have to register for VAT.


    Register as a limited company. That's what I say.


    I agree, if you are going to do it then you might as well do it properly. Setting up a Ltd company is easy enough.


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    #4
    GaryKelly
    Closed Accounts Posts: 18 ✭GaryKelly


    Yea would recommend the Limited route. I just set up using a crowd called "business company formations", cost 299 euro and took about 2 weeks to get all the right bits of paper work in. Trouble can be finding a unique name that isn't already used and the CRO are fussy about using placenames as a unique name for example you couldn't set up Irish Crystal as you already have Waterford there.


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