Trading online before legal entity

mcbert

I'm in IT, and I have ideas for various side projects for software/online services (micro-Saas [software as a service]). The hope would be that one/some of them could make some money. I want to try something, put it out there, if there is interest, keep going with it, if not, move on to the next one. If they dont make money, it will have been a hobby, and l'll have enjoyed the journey at least. Im not quitting a decent job to persue a half-baked idea. Ive built things over the years, but nothing yet that I might charge for.

It is a model that I know has worked for others, but I dont really know of many people in Ireland doing this.

But I dont want to go through the inconvenience and cost of setting up an official business until I find an idea that actually has potential. That means I want to start charging - if even for only a few subscribers - take credit card payments etc, BEFORE I have registered a business, or registered for VAT, or done anything like that. e.g. If I have earned 300 euro over several months, I'd like to just sort that out at the end of the year, as part of personal tax return.

Is this reasonable? Thanks.

Mick Tator

When you start out with a business idea the object should be to make it profitable asap. If you start with a vague notion and the outlook that you agree not to mind if it’s unprofitable, you need to rethink. It’s not a hobby, it’s a cost. Do the math, do a business plan, set objectives, keep track of your time and other expenses.

If you are going to operate in the same niche as your employer you need to examine your employment contract to see if that is allowed. If the business gets bigger or has people calling, are you allowed operate a business from your home?

You will run into issues with customers if you are not registered for VAT, even if you fall below the threshold. Research that. Also research professional indemnity insurance.

To start trading you need to register a business name with the CRO, same to get a domain. That’s sufficient, no need to form a company, you are the business and your assets are unprotected, hence PI insurance.

Doing the homework is an exercise that will force you to think about the project.

mcbert

I get where you are coming from, but what you are suggesting is the opposite approach of what I am trying to do. The whole point is that it is a hobby. It is part time. It is an experiment in parallel with a separate full time job, not dropping everything to go all in on one big idea, with all the associated risk. The math will be done, and a business plan, expenses tracked etc. But the expectation would be to explore interest, and earn some extra money along side my main job, not use up all my savings going full time on this, risking everything for a full salary before all my saving run out. The approach is not uncommon, but I dont know what is the minimum required to do so in an Irish context.

If the busines gets bigger, well, then the existing full time job goes away, this becomes my full time job, and everything would be done 'properly'. What Im interested in is what is the minimum I need to do before it is ready to become my full time job.

Same niche as existing employer - good point, but not a concern.

Registering for VAT - yes. Thanks.

And professional indemnity - I did not think of that. Brilliant. Thanks.

CRO & Domain. ok, I already own a relevant domain, but yes, I suppose the name itself needs to be registered. Thanks.

eusap

From a Revenue point of view you earn money and declare it for tax, there ok

VAT is only an issue when you go over the threshold

From a Legal point of view you can not falsely represent to be a company when not, if you represent your self as your name will a customer take you seriously ?

Really depends on the industry and the marketplace