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setting up as a LTD company advice..? pros and cons

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  • 20-06-2012 10:03pm
    #1
    LithiumKid1976
    Registered Users Posts: 432 ✭✭


    hi
    i have been offered a job in IT, but part of me accepting the job, requires me to set up as a LTD company.

    its not somthing i have done before, and am looking for advice on it, regarding the pros and cons with it.

    i hope to speak to an accountant about it shortly, but would still like to hear from anyone out there who has done it... whats good and whats bad in this kind of set up..?

    thanks..


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    #2
    lakill Farm
    Registered Users Posts: 4,735 ✭✭✭lakill Farm


    set up a ltd comapny

    stay on top of everything and you will be fine.

    Pm me if u are looking for very competive quotes;)


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    #3
    The Apprentice
    Registered Users Posts: 1,130 ✭✭✭The Apprentice


    Self employed = No safety net if you fail
    As lakill Farm stated if you can stay on top of things on that note you,ll be fine but always
    remember what if that particular work dries up.
    Don't suggest to any business keep all your eggs in one basket, this may not be applicable to you but keep it in mind.


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    #4
    dbran
    Registered Users Posts: 2,094 ✭✭✭dbran


    Hi Lithiumkid

    There would be a lot more administration and paperwork involved with running a limited company compared to a sole trader. You will have to file multiple returns with revenue and with CRO every year. However if you are earning sufficient money a company can work out to be more tax efficient then the equivalent sole trader. As mentioned before, provided you keep on top of things you will be fine.

    One thing that would be important though is how long do you expect the contract to last. It can be expensive to open up a company and then shut it down again a short time later.

    Kind Regards

    dbran


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    #5
    srsly78
    Registered Users Posts: 7,157 ✭✭✭srsly78


    The Apprentice wrote: »
    Self employed = No safety net if you fail

    Incorrect. Even people with no "stamps" can get means tested social welfare.

    OP as others have said it's not worth the hassle just for a once-off contract. You can operate through an "umbrella company" (google it) to save hassle of setting up/shutting down company.

    If you are in it for the long-haul then definitely talk to an accountant and set up a company.


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    #6
    Swampy
    Registered Users Posts: 2,104 ✭✭✭Swampy


    There's companies who can do that for you and manage all you paperwork, billing, vat returns etc if you don't want to do it. My brother is a pilot for ryanair and the contract pilots have to have a ltd company. I'll see if I can find the company name for you.


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    #7
    jhegarty
    Registered Users Posts: 6,440 ✭✭✭jhegarty


    How expensive is a service like that Swampy ?


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    #8
    dbran
    Registered Users Posts: 2,094 ✭✭✭dbran


    jhegarty wrote: »
    How expensive is a service like that Swampy ?

    Relatively expensive. If you use an umbrella company you will typically be set up as an employee and will therefore be subject to Employers PRSI at the "A" rate ( up to 10.75%) and Employees PRSI (up to 4%). This will all come out of the amount that you are paid by the contractor. You will also have to pay their management fees of about €100 per month. But the advantage is that if is a short term contract you can come and go as you please. It is therefore very convenient in that way if you are unsure that the contract will last that long.

    If you go the other route and set up your own company then you just pay employees prsi of 4.5% and your accountants fees circa €1000 pa plus the once off cost to set up the company (say <€500) and to shut it down (<€500). So if you are going to be contracting for a few years then this is the better option.

    Some of the better know umbrella outfits are http://www.iconaccounting.ie/Umbrella-Company-PAYE-Member.html or http://www.cxc.ie/contracting/umbrella.html

    Regards

    dbran


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