How much to set up a company?

average hero

Hi everyone,

I have numerous ideas to set up companies. The industry isn't really relevant as I have ideas and contacts in many different industries that I am willing to set up in.

My main issue is how much it costs to set up and maintain a company. This is because my father is really dissuading me from setting up a company. I think it's because his successful construction company has turned unsuccessful during these tough economic times that we are having.

If I were to set up a small media company, working from my laptop in my bedroom, and I don't earn much income, I can't get taxed right? And are taxes and fees a big problem for businesses in general?

I know I am asking very general questions, but I'm predicting that my small media company won't make much for a few months anyway.

Thanks everyone

mneylon

Do you mean "business" or "limited company"?

The cost of setting up a "business" is significantly lower than that of setting up an LTD

Regardless of how much you earn you will have tax liabilities

It might be worth your while to talk to your bank, or an accountant (or both)

business bloomer

Hey, if you start as a sole trader it costs you 20eur to register the company. Obviously you're going to pay tax on your income if it is higher than the minimum one. Check http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html for more info! Best of luck

smcgiff

The actual cost of setting up a company - registering with the CRO - will cost approx €200 to €250 per company on average (but, some will do the job for a deal less - i.e. come back to me in a month and I'll be set up to do it )

Cost for companies have changed in the last few years. Before every company had to be audited and that increased the accounting cost significantly. Now, the vast majority of companies are audit exempt. You can fall into an audit requirement if you don't follow certain rules, which bring me to the next cost.

There is a time cost - with companies you'll have extra filing responsibilities such as the annual B1 form. Nothing major, but a consideration.

There are of course benefits to forming a company, but it it's only a part-time/hobby job with little or no exposure to creditors then there may be no need to form a company.

As to other business set up costs i.e. computer etc. You'll be the best person to answer that.

Re taxes - as the saying goes (roughly) there's nothing worse than having to pay taxes, except not earning enough to have to pay taxes.

Your tax situation may differ depending on whether you form a company or are self employed. But if the profits are small and you take them all out there will be very little difference.

smcgiff

business bloomer wrote: »

Hey, if you start as a sole trader it costs you 20eur to register the company.

€20 to register a company? Do tell...

MrFrisp

smcgiff wrote: »

€20 to register a company? Do tell...

Hi smcgiff...

This should help......

http://www.cro.ie/ena/downloads-business-name.aspx

http://www.cro.ie/ena/downloads-company.aspx

J.Ryan

business bloomer wrote: »

Hey, if you start as a sole trader it costs you 20eur to register the company. Obviously you're going to pay tax on your income if it is higher than the minimum one. Check http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html for more info! Best of luck

smcgiff wrote: »

€20 to register a company? Do tell...

SexyGuy wrote: »

Hi smcgiff...

This should help......

http://www.cro.ie/ena/downloads-business-name.aspx

http://www.cro.ie/ena/downloads-company.aspx

Thats a business name not a company, two very different things.

MrFrisp

J.Ryan wrote: »

Thats a business name not a company, two very different things.

Isn't the second link the one he is looking for??

I was just offering options,that's all.

J.Ryan

Second one is a start, but smcgiff was being sarcastic in relation to the previous post,.

MrFrisp

J.Ryan wrote: »

Second one is a start, but smcgiff was being sarcastic in relation to the previous post,.

Ahh fair enough...

Thanks....:D

TylerIE

average hero wrote: »

Hi everyone,

I have numerous ideas to set up companies. The industry isn't really relevant as I have ideas and contacts in many different industries that I am willing to set up in.

My main issue is how much it costs to set up and maintain a company. This is because my father is really dissuading me from setting up a company. I think it's because his successful construction company has turned unsuccessful during these tough economic times that we are having.

If I were to set up a small media company, working from my laptop in my bedroom, and I don't earn much income, I can't get taxed right? And are taxes and fees a big problem for businesses in general?

I know I am asking very general questions, but I'm predicting that my small media company won't make much for a few months anyway.

Thanks everyone

You can set up a Limited Company which is treated legally as a seperate entity to you. In law its essentially anot her person, although like an parent with a child, if the company does something wrong, you may be held responsible. Your company will be obliged to register with revenue and to keep good accounts.

Or you can set up a business in that you run a business as "John Smith" doing media from your bedroom. If doing so you are generally oblidged to register with Revenue as a sole trader (theres some limited exceptions). If you register with revenue it doesnt mean you will end up paying tax, but you are obliged to tell them your profits each year. This would require you to keep a good set of accounts.

Citizens information has a brief overview.

If there is any possibility your business would be earning more than a few thousand profit in a year, or that you will be dealing or providing services to groups who will require an invoice or will be paying by cheque or bank transfer its essential that you ensure you are registered with revenue. Even if not, its still highly advisable to be legitimate rather than risking otherwise.

You can open a business account with Bank of Ireland (in your own name without any obligation to register for tax or anything) and with that you get a business start up package that includes a free one hour consultation with an accountant. Perhaps your tax concerns could be briefly discussed there?

smcgiff

J.Ryan wrote: »

Second one is a start, but smcgiff was being sarcastic in relation to the previous post,.

Ah, sarcastic is a bit harsh, lazy more like.

J.Ryan

smcgiff wrote: »

Ah, sarcastic is a bit harsh, lazy more like.

Asking where the previous poster could set up a company for €20.00, sarky more so.

smcgiff

J.Ryan wrote: »

Asking where the previous poster could set up a company for €20.00, sarky more so.

No point derailing the thread, but by saying Do Tell, I was open to the possibility there was something I didn't know.

mari2222

The cost of setting up (registering) a company is the CRO fee - 20 euro, and the cost of having company articles and memorandum, Form A1 prepared and submitted. If you are able to do it yourself, there is nothing to stop you. But you should consider carefully whether you are able to produce those legal documents. And before any of that, you should ask yourself WHY do you want a limited company? On a small scale there are few advantages over being a sole trader, and many drawbacks.
That's my tuppenceworth anyway.

TylerIE

mari2222 wrote: »

The cost of setting up (registering) a company is the CRO fee - 20 euro, and the cost of having company articles and memorandum, Form A1 prepared and submitted. If you are able to do it yourself, there is nothing to stop you. But you should consider carefully whether you are able to produce those legal documents. And before any of that, you should ask yourself WHY do you want a limited company? On a small scale there are few advantages over being a sole trader, and many drawbacks.
That's my tuppenceworth anyway.

Registering a company is €100 for manual submissions, €50 for disc but thats only available in certain circumstances. Plus your memorandum and articles.

A business name is €20. What disadvantages do you see with a ltd company?

Mr Moxie

average hero wrote: »

Hi everyone,

I have numerous ideas to set up companies. The industry isn't really relevant as I have ideas and contacts in many different industries that I am willing to set up in.

My main issue is how much it costs to set up and maintain a company. This is because my father is really dissuading me from setting up a company. I think it's because his successful construction company has turned unsuccessful during these tough economic times that we are having.

If I were to set up a small media company, working from my laptop in my bedroom, and I don't earn much income, I can't get taxed right? And are taxes and fees a big problem for businesses in general?

I know I am asking very general questions, but I'm predicting that my small media company won't make much for a few months anyway.

Thanks everyone

Some good solid advice given here, particularly from TylerIE.
In my opinion you only need to be a sole trader for the moment.
I would register the business name with the Companies Registration Office on their website cro.ie and also check out core.ie and also register yourself with the Revenue Online Service at ros.ie you will most of the info you need to learn about the obligations of owning your own business. Business bank account is a great idea, they offer some training also, lean hard on them for advice!

mari2222

TylerIE wrote: »

Registering a company is €100 for manual submissions, €50 for disc but thats only available in certain circumstances. Plus your memorandum and articles.

A business name is €20. What disadvantages do you see with a ltd company?

Sorry - the fees probably changed - thanks for correcting; disadvantages I see to a "limited company" for small operators is the complexity of paperwork; the burden of compliance with regulations imposed on companies even if these were principally designed for "big" companies; the requirements to file with CRO as well as Revenue. In general, a sole trader has less onerous filing requirements/paperwork, which should be easier to manage.

Mr Moxie

mari2222 wrote: »

Sorry - the fees probably changed - thanks for correcting; disadvantages I see to a "limited company" for small operators is the complexity of paperwork; the burden of compliance with regulations imposed on companies even if these were principally designed for "big" companies; the requirements to file with CRO as well as Revenue. In general, a sole trader has less onerous filing requirements/paperwork, which should be easier to manage.

Hi mari2222

I am a sole trader, I registered/filed the business name with cro by registering online to use the Companies Online Registration Environment (core.ie). It is a great service and easy to use.
I also registered with Revenue Online Service ros.ie so that I could carry out all my requirements online, its a little daunting at first but not very difficult to navigate. I would recommend it to sole traders, basically you are registering your PPS number (not business) as being self employed, there is also great info on the site re being self employed.
As far as I know it doesn't matter if you ever return to employment as your employer will be registering you as employed.

Are these some of the requirements you mentioned?

mari2222

Mr Moxie wrote: »

Hi mari2222

I am a sole trader, I registered/filed the business name with cro by registering online to use the Companies Online Registration Environment (core.ie). It is a great service and easy to use.
I also registered with Revenue Online Service ros.ie so that I could carry out all my requirements online, its a little daunting at first but not very difficult to navigate. I would recommend it to sole traders, basically you are registering your PPS number (not business) as being self employed, there is also great info on the site re being self employed.
As far as I know it doesn't matter if you ever return to employment as your employer will be registering you as employed.

Are these some of the requirements you mentioned?

Hi Mr Moxie
Yes, as a sole trader you need to keep Revenue informed, but if you were a limited company you would have to keep Revenue posted and also keep the CRO posted with your accounting information. And if you were unfortunate enough to be a limited company and missed your CRO filing deadline, you would be obliged to get your accounts audited for two or three years which would be costly.

If you are working for yourself I think it is easier to do what you are doing, and trade as a sole trader.

mari2222

Mr Moxie wrote: »

Hi mari2222

I am a sole trader, I registered/filed the business name with cro by registering online to use the Companies Online Registration Environment (core.ie). It is a great service and easy to use.
I also registered with Revenue Online Service ros.ie so that I could carry out all my requirements online, its a little daunting at first but not very difficult to navigate. I would recommend it to sole traders, basically you are registering your PPS number (not business) as being self employed, there is also great info on the site re being self employed.
As far as I know it doesn't matter if you ever return to employment as your employer will be registering you as employed.

Are these some of the requirements you mentioned?

Hi again Mr Moxie

I meant to say that there are some good posts on the Accountancy forum that relate to sole trader accounts and so on, dont know if you had a chance to browse them for some tips.

Mari2222

EIREHotspur

mari2222 wrote: »

.... disadvantages I see to a "limited company" for small operators is the complexity of paperwork; the burden of compliance with regulations imposed on companies even if these were principally designed for "big" companies; the requirements to file with CRO as well as Revenue. QUOTE]

Complexities howso?
Are you talking about VAT every two months or what?

As I am in a Tech field I see the advantages of setting up as a company so as to offset Tech equipment as part of my Business expenses and therefore not having to buy what I would be buying anyway from a wage.

smcgiff

EIREHotspur wrote: »

As I am in a Tech field I see the advantages of setting up as a company so as to offset Tech equipment as part of my Business expenses and therefore not having to buy what I would be buying anyway from a wage.

You wouldn't need to form a company for that, just register as a business and have the equipment invoices addressed to the business.

I'm not 100% sure, but are people here confusing setting up and registering a business and the formation of a company

barneystinson

EIREHotspur wrote: »

Complexities howso?

See for yourself over on the CRO site, administering compliance for a Ltd Company is a whole different kettle of fish to a sole trader:
http://www.cro.ie/ena/post-registration-company.aspx

Most particularly around the requirements for preparing and filing annual accounts:
http://www.cro.ie/ena/annual-return-small.aspx

Also, from the tax point of view, every year you've got a Corporation Tax return to submit for the company AS WELL AS an income tax return for the individual(s) who formed it.

later12

smcgiff wrote: »

The actual cost of setting up a company - registering with the CRO - will cost approx €200 to €250 per company on average (but, some will do the job for a deal less - i.e. come back to me in a month and I'll be set up to do it )

Or do it yourself, OP.

I'm in the process of setting up my own limited company with a friend at the moment.

In terms of setting up the company, it's cost me €50. It is not difficult.

Muas Tenek

Filing an A1 form with CRO (new company) costs €100 on paper filing or €50 online (CORE) but don't forget that once a company is registered with the CRO an annual B1 form must be returned by the NARD (Next Annual Return Date) accompanied by audited accounts (which must be supplied with the Auditor Registration Number) so expect NARD fees of €40 (paper) or €20 (CORE) plus auditor charges as an annual charge.
Also if it is an application to form a limited company (PLC) the A4 form also costs €300

mneylon

later10 wrote: »

Or do it yourself, OP.

I'm in the process of setting up my own limited company with a friend at the moment.

In terms of setting up the company, it's cost me €50. It is not difficult.

Setting up a business isn't the same as setting up a company.
One of the other posters listed the various forms that are needed and their costs, so if you've only spent 50 euro so far it sounds like you've missed a few ..

smcgiff

later10 wrote: »

Or do it yourself, OP.

I'm in the process of setting up my own limited company with a friend at the moment.

In terms of setting up the company, it's cost me €50. It is not difficult.

Mmm - unless your friend has registered with the CRO and has paid to have a Memos and Arts templates set up it cannot be done for €50 even online.

If so well and good, but that isn't going to be open to everyone else. Your friend should also be able to tell you the other mandatory cost outlay you'll need to incur to keep within company law.

How did you get on preparing the Memo and Arts?

later12

smcgiff wrote: »

Mmm - unless your friend has registered with the CRO and has paid to have a Memos and Arts templates set up it cannot be done for €50 even online.

Why would we have paid someone to set up the M&As for us? We've used a number of different sources to get it together, including one in which I myself was a previous director and another of my partner's; for the type of activity in which we are engaging, one would find that M&As vary very little.

But you're right. Now that i think of it the stamp costs in the region of €20 each? It must be closer to, gosh, an entire €70 spent by now. Hmm.

smcgiff wrote: »

The actual cost of setting up a company - registering with the CRO - will cost approx €200 to €250 per company on average (but, some will do the job for a deal less - i.e. come back to me in a month and I'll be set up to do it )

You're a company formation 'professional' yourself are you? What does one have to do to call themselves a company formation professional?

Look, there is plenty of free professional advice out there in setting up a company OP. You need to be reasonably careful about the specifics of what type of business you will be engaging with in your objects clause, but other than that I would consider it a very straightforward affair.

later12

Blacknight wrote: »

One of the other posters listed the various forms that are needed and their costs, so if you've only spent 50 euro so far it sounds like you've missed a few ..

Missed a few... needless expenses?

TylerIE

later10 wrote: »

Why would we have paid someone to set up the M&As for us? We've used a number of different sources to get it together, including one in which I myself was a previous director and another of my partner's; for the type of activity in which we are engaging, one would find that M&As vary very little.

But you're right. Now that i think of it we have got a draft template that I think costs in the region of €10? It must be closer to €60 spent by now.

Did you not have to pay the CRO €100 for filing?

IIRC The €50 fee only applies in very limited circumstances.