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SOLE TRADER VERSUS LIMITED COMPANY
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SOLE TRADER A sole trader is a trade that is owned and controlled by one person. This is very attractive for those who wish to retain ownership of the business. A "sole trader" is described as a person trading under his / her own name, or a registered business name. Many sole traders decide to operate under their own name and do so without any problem. However, if you use a name other than your surname, you must register the name in accordance with the Registration of Business Names Act of 1963 for a small registration fee. Advantages of the Sole Trader The sole trader is not required to file accounts which would be available for inspection by the public. Fewer legal formalities compared to other structures. The income from the business is personal income and expenses which are incurred "wholly and exclusively" in the course of the trade are allowable deductions. Closure of the business requires less formality. Disadvantages of the Sole Trader The owner is personally liable for all debts of the business. Raising capital can be more difficult. The life of the business depends entirely on the owner. LIMITED COMPANY A limited company is a separate legal entity. The owners are shareholders and its directors make decisions on behalf of the company. As a separate entity it has sole responsibility for its debts. Its liabilities are limited to the paid-up share capital, therefore the company is said to have "limited liability". There are a number of exceptions to this, where company debts become personal debts. Advantages of a Limited Company Limited liability - in general, shareholders are only liable to lose the share capital they subscribe. Pension contributions can be made at the Company's expense. Raising finance can be less difficult. There can be many owners of the business. Disadvantages of a Limited Company Limited liability may be neutralised as lenders, in practice may seek personal guarantees. Legislative requirements may be costly and time consuming. The need to prepare and file audited accounts with the Companies Registration Office. There are surcharges on undistibuted investment incomes. |
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First Consultation FREE We will explain the services we provide in detail and find the best package of services to suit you. Evening Appointments As we realise you may not wish to take time out of your work day to meet us, we can arrange a late evening appointment. Company Formation Our pack includes a company seal and company register. We also complete the first CRO B1 return to be filed six months after incorporation. click here to review details required. Audit Exempt We can explain how to claim audit exemption and prepare and file non-audited financial statements at competitive rates. Company Voluntary Strike-off We can undertake this process, including financial statements preparation, the placement of required newspaper advertisement and tax deregistration. Audit Services If you do not qualify for audit exemption for any reason, as Registered Auditors, we can audit your financial statements. Polish Speaking Staff We have a fulltime Polish member of staff to facilitate you. Contact us today to find out more. email: admin@efmolloy.com |