Starting Your Business

 

 

If you have decided to start your own business, there are a few things you need to consider, depending on your current situation.  There are different supports and regulations for those who may be unemployed, employed, or coming from outside Ireland to set up this business.

 

Unemployed:

If you are currently unemployed, you may be eligible for the Back to Work Enterprise Allowance or the Short-Term Enterprise Alloawnce.  There are grants and extra supports available under these schemes for market research, business plans, training, and also access to loans to buy equipment.

Regional micro-enterprise networks provide free training, mentoring and access to start-up loans to assist unemployed people to set up a business, or become self-employed.  You can find further information on micro-enterprise networks on the First-Step website - http://www.first-step.ie

 

Legal Structures:

You can set up a business as a sole trader, as a partnership, or as a limited company.  The type of organization you choose depends on the kind of business you will be running, with whom you will be doing business, and how you feel about the possible ‘risk’ involved.  If you have any doubts, it is best to seek legal advice from a solicitor or accountant about which arrangement would best suit your venture.

 

As a Sole Trader, it is relatively simple to set up.  However, there is a danger that, should your business fail, you might be exposing your personal assets to being claimed against by your creditors.  The main legal obligation in this arrangement is that you must register as a self-employed person with the Revenue Commissioners (Tax & PRSI).  Also, if you wish to use a business name, you must register the name with the Companies Registration Office - http://www.cro.ie

 

In a Partnership, where 2 or more agree to set up and run a business together, an agreement to this effect should be drawn up by a solicitor.  Partners are jointly responsible for running the business and likewise, are jointly responsible for debts if it fails.

 

If you choose to set up as a Limited Company, this business is a separate legal entity in other words, if the company gets into trouble, the creditors generally only have a claim on the assets of the company.  The company must be registered with the Companies Registration Office (CRO – see link above) and company reports and accounts must be returned to the CRO each year. 

 

You can find more information about all these on the CRO website.

 

Business Plan and Funding:

Wicklow County Enterprise Boards provide supports including grants to local businesses that are starting up, or in development.  You can find information about training and financial supports on their website - http://www.wicklowceb.ie

 

In May 2011, the new Jobs Initiative was announced whereby there is to be a partial loan guarantee scheme for companies, as well as a micro-finance fund to provide small loans to start-up businesses - http://www.djei.ie/press/2011/20110510d.htm

 

 

Getting Credit:

Although currently many small businesses are finding it difficult to get credit, Your Business Your Bank is a guide on how to get funding and includes information on how to prepare a bank credit application - http://www.djei.ie/publications/enterprise/2010/YourBusinessYourBank.pdf

 

If your application for credit is refused by one of the participating banks, and your application was in writing, you may apply to the Credit Review Office to have your case reviewed - http://www.creditreview.ie

 

There is an application form on this website and the fee for the review ranges from €100 to €250.

 

 

Tax & PRSI:

How your tax liabilities are incurred depends on how you have set up your business.  If it incorporated as a company, then it is liable for corporation tax.  New companies may get tax relief on the first 3 years of corporation tax.  From 2011 the value of the relief will be linked to the amount of employers’ PRSI paid by a company in an accounting period, subject to a maximum of €5,000 per employee.

 

If your  business is not incorporated, you are considered to be a sole trader and you pay tax under the self-assessment system.  Further information is available in the Revenue booklet IT48 Starting in Business.

 

If you are a subcontractor working in construction, forestry or meat processing, you may apply for a C2 Certificate.  This allows you to receive payments from a contractor without Relevant Contracts Tax (RCT) being deducted - http://www.revenue.ie/en/tax/rct/index.html

 

PRSI – If you are self-employed, you pay Class S social insurance contributions.  There is a guide PRSI for the Self-Employed-SW74 on the website of the Department of Social Protection.  If you are an employer and you create new and additional jobs in 2010 and 2011, you may qualify for an exemption of employer’s PRSI for those jobs.

 

 

Employment Rights and Employers’ Obligations:

 

If you are starting up a business and decide to recruit staff, you must register for PAYE and PRSI with the Revenue Commissioners.  You need to know your obligations and duties as an employer and what are the rights of employees.  There is a guide for employers who are starting a new business with paid employees on the website of the National Employments Rights Authority - http://www.employmentrights.ie/en/informationforemployers/startinganewbusiness/

You can also access documents on the Citizens Information website on minimum wage, social insurance (PRSI), leave and health and safety - http://www.citizensinformation.ie

 

Other sites which may be of assistance to you are:

 

Department of Social Protection – Toil and Trouble – a guide to self-employment - http://www.welfare.ie/EN/Publications/ToilandTrouble/Documents/toiltrouble.pdf

 

Enterprise Ireland for all sorts of advice and financial support for High Potential Start-Up businesses - http://www.enterprise-ireland.com/en/Start-a-New-Business/Information-Store-for-Start-ups/

 

IDA (Irish Development Authority) – Govt agency with responsibility for securing new investment from overseas in manufacturing and internationally traded services sectors – may provide grants to expand existing operations in Ireland - http://www.idaireland.com/