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Changing Type of Business

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  • 16-01-2013 1:30pm
    #1
    newdigi
    Registered Users Posts: 76 ✭✭


    Hi all

    we have a retail business which has been in operation for the past 4 years.
    it's not working out and we are in the process of changing to a completely different business in the online 'space' (non-retail)

    we currently have a limited company and trade under a trading name for the retail business.

    i'm wondering though should be close down this limited company altogether and start/register a new limited company for our new business.

    is there any advantage to doing this? ie: PRSI exemptions etc

    we wont be leaving any debts behind with the existing business and will be fully paid up to all our suppliers.

    Thanks


Comments

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    #2
    sandin
    Closed Accounts Posts: 1,594 ✭✭✭sandin


    I'd close down and start a new one especially as its non related.

    With no debts / liabilities on the old one, there will be no issue closing it down.


    Advantages of new one -

    1. Some banks give you free banking for a while.
    2. You can raise funds through EIIS if needed. - you can with old company but you have to show you have extra staff.
    3. No corporation tax for 3 years with new company.
    4. No worries of a tax audit going back years and uncovering a genuine error which could be costly.


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    #3
    newdigi
    Registered Users Posts: 76 ✭✭newdigi


    Thanks sandin.

    it's the corporation tax clause I couldn't remember.
    I missed out on that one with my current company by a few months.

    funding would also be important. i've been in touch with enterprise board who wanted a business plan. any advice on that? or any other sources of funding available?

    so many questions! :)


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    #4
    sandin
    Closed Accounts Posts: 1,594 ✭✭✭sandin


    EIIS is a great mechanism.

    Almost every business can get it.

    You find the investor, they invest say 10k. They get 30% tax relief in year one so new investment is 7k. In year 3 if the company has created jobs, the investor gets another 11% tax relief, so net investment is now 5900.

    Hopefully the investment has grown and you could buy back the shares at market rate.

    Best advice I got years ago was to get a good accountant on board early. They can save you from many mistakes and a good one can be worth their weight in gold.


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