Dublin Sole Trader v Limited Company

K

kube

Guest
Hi, can anyone give advice or tell me the 'pros and cons' of setting up a Limited company. My husband was made redundant last year and our Accountant is advising him to set up as a Limited company. I am a Sole Trader working freelance and so the idea would be that we would both be directors of this 'new' company. I have a friend who is in the same line of business as my husband and she has strongly advised NOT to go this route as it cost them a huge amount of money. They went bankrupt, her husband is back as a Sole Trader now.

It sounds like the right thing to do when speaking to our Accountant, however I'm not sure what to think now.

Any advice or personal experience of either would be much appreciated or if you could point me in the right direction to get some information on the issue.
Thanks
 
There is only one real advantage to being a ltd co which is the safety afforded to you personally if you (your company) goes into debt .


That's why your comment on your friend is confusing,or,rather, contradictory...
You say they had a company and "they went bankrupt". Why would they go bankrupt if they had a limited liability company? Why did it cost them a huge amount of money ?

If they had a company and it went bankrupt then in the normal course of events it should not have impinged on their personal assets. -that's why people set up ltd liability companies.

Most accountants will advise the ltd liability route if it is a trading company that involves the buying and selling of goods -most especially if you are selling on credit, and/or if you have high running costs (rent,staff etc). There is always the risk that the company will fail and incur debts.

But if your business involves no great running costs , has little risk element (debtors and creditors) and is basically a one-person business with no big turnover then there is little reason to have a company . Companies do mean annual accounts and other hassle.

You really have to work ouit the pros and cons - and -am being blunt here - read up about it.
 
oldnick do you have any recommendations on where one could actually read up on this?
 
You must log in or register to reply here.
Back
Top