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Sole Trader And Limited Company?

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  • 08-01-2017 7:19pm
    #1
    hunter164
    Registered Users Posts: 2,081 ✭✭✭


    Hi,

    I set up a side clothing business with a friend as a limited company.

    But, I am also looking at setting up as a sole trader in the electrical business.

    Is it possible to be both sole trader and a director of a limited company?

    Thanks


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    #2
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,384 CMod ✭✭✭✭Pawwed Rig


    Yes that is fine. I wonder about your reasoning though. Do you need a limited company?


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    #3
    hunter164
    Registered Users Posts: 2,081 ✭✭✭hunter164


    Well we went with the limited for the clothing company as we have financial overheads, whereas, in the other business I'm looking at setting up my costs will be low.


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    #4
    Digital_Guy
    Registered Users Posts: 241 ✭✭Digital_Guy


    hunter164 wrote: »
    Well we went with the limited for the clothing company as we have financial overheads, whereas, in the other business I'm looking at setting up my costs will be low.

    I'd look at how much you envisage making as opposed to what your costs will be, as a way of deciding whether you need to set up a limited company. I'd be inclined to work together for a while first at least. Plus I'd be cautious about setting up a business with a friend, although I am sure it could work out great.


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    #5
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Pawwed Rig wrote: »
    Yes that is fine. I wonder about your reasoning though. Do you need a limited company?


    Sure if there is at least two involved in the clothing business then it makes sense to form a company because it eliminates the risk to their personal assets in the event of the business failing. Lot more paperwork involved as opposed to sole trader though id imagine


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    #6
    Digital_Guy
    Registered Users Posts: 241 ✭✭Digital_Guy


    Deleted User wrote: »
    Sure if there is at least two involved in the clothing business then it makes sense to form a company because it eliminates the risk to their personal assets in the event of the business failing. Lot more paperwork involved as opposed to sole trader though id imagine

    As per the above, it really depends on how big the business is going to be in the early stages. If you are turning over hundreds or low thousands, then it might not be worth setting up a company for a while. It's not a trivial process, requires regular reporting and filing and costs a bit to dissolve as well (if needed). Plus it could be good to work together informally for a short while first at least.


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    #7
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,384 CMod ✭✭✭✭Pawwed Rig


    Deleted User wrote: »
    Sure if there is at least two involved in the clothing business then it makes sense to form a company because it eliminates the risk to their personal assets in the event of the business failing. Lot more paperwork involved as opposed to sole trader though id imagine

    The first thing I would ask is how much the business is generating and how much the two owners need to live on. Probably off topic for this thread though.


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