Maybe the accountants on this forum can clear this up.
As I calculate it, a start up small firm is best constituted initially as a sole tradership until the income goes above ~ €20,000. Then you are better off working as a limited company - assuming you can maintain the higher level of income for your enterprise.
Yet many accountants advise people starting up to go for a sole tradership all times.
I don't get this.
Can anyone pencil out the reasons for this - to me at least - seemingly foolish advice ?
A friend has a (shop) business which pulls in about €3.5 k - €4k a week with a mere 2 employees (owner + wife, the proprietors) as a sole tradership on his wife's maiden name. I appreciate the fact that its his affair to do so but I reckon he's leaving tens of thousands of euros on the table every year for Uncle Paddy.
As I calculate it, a start up small firm is best constituted initially as a sole tradership until the income goes above ~ €20,000. Then you are better off working as a limited company - assuming you can maintain the higher level of income for your enterprise.
Yet many accountants advise people starting up to go for a sole tradership all times.
I don't get this.
Can anyone pencil out the reasons for this - to me at least - seemingly foolish advice ?
A friend has a (shop) business which pulls in about €3.5 k - €4k a week with a mere 2 employees (owner + wife, the proprietors) as a sole tradership on his wife's maiden name. I appreciate the fact that its his affair to do so but I reckon he's leaving tens of thousands of euros on the table every year for Uncle Paddy.
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