Sole Trader vs. LTD?

I'm currently am setting up a small wedding services which will be solely run by myself (for the first few years anyway)

I was made redundant a year and half ago and in a panic I set up an LTD even though I wasn't really sure if this was the best option. I had a friend who knew how to go through the process and in heist i set it up. With such a small business is been a sole trader a better option than LTD? what are the main big differences

I have a .ie website now attached to the LTD (to get a .ie business you must prove a business connection to the .ie domain) Because I haven't been trading I'm thinking about disolving the LTD as I'm not sure what i'm doing but I dont want to loose the right to my .ie

Should I disolve and start again as a sole trader??

Hi,

There are pros and cons to operating either way, but I generally advise that when starting off, operate as a sole trader. There are a lot of compliance issues and costs connected with running a LTD that you do not need when commencing business. You can always incorporate at a later stage.

I can't comment on the whole .ie situation.

Hope this helps in someway

Matt

The question of whether to set up as a sole trader or a ltd company is one that come up again and again. Mainly because no one structure is right for all businesses, it needs to be looked at on a case by case basis. There are advantages and disadvatages of both. Obviously the main benefit of the Ltd company is that you have Ltd Liability which in theory protects your personal assets. However as we have seen in recent court cases, the personal guarantees required by financial institutions in some cases can override this protection. The level of debt, creditors etc of the business will determine the importance of Ltd liability. A downside of the ltd company is the additional admin required i.e. company law requirements, corporation tax, close company rules etc and the related professional fees. That said, there are other benefits of Ltd company route e.g. pensions, tax free payments from the co, tax efficient exit. You need to look at all factors and see what is best for your business.

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Are all your returns up to date with the CRO. Even if you are not using the company the B1 must be filed on time.

As far as I know, there's no reason why you shouldn't keep your .ie domain name if you decide to change from a ltd company to sole trader. Firstly, no-one's going to check; secondly, sole traders are entitled to a .ie too. I have one for my sole trader business.

My husband registered his business as a ltd company 18 months ago. The main idea was to maximise our tax-free company pensions. Unfortunately, with the recession, we can't afford to pay ourselves salaries (I'm co-director), let alone have anything left over for pensions. Bad timing, I guess, but hopefully things will improve.

You should be able to get some decent advice from a thoughtful accountant on the financial pros and cons of de-registering your company. If yours isn't providing this, ask for recommendations and find one who will. Or see if your local Enterprise Board can come up with the name of a business advisor.

thanks that is all really great advice....I did think that there would be lots more "compliance issues" and general legal stuff with the LTD that i really don't need the stress of ...so maybe the suggestion of sole trader first then LTD later as I grow might be the most sensible thanks Mattyh
joe 90 my B1s are up to date I will have to do another return in September (i think) the first year you can return a pretty blank B1 but this year i will have to complete it properly which scares me ...and this is actually the main reason I want to dissolve
mct1 I think your advice of speaking to an enterprise board business adviser might be the first thing I'll do before I make any steps in dissolving anything.
Thanks everyone