Accounting Information for a Sole Trader / Partnership
We can advise on what a sole trader / partnership is, how to set up, what the differences are and which is most beneficial to your business. We offer accounting services tailored to sole traders / partnership businesses
What is a Sole Trader?
A sole trader is a business owned by one person. The main advantages of setting up as a sole trader are:
- Control – the business owner is in total control, owning and running the business as the see fit
- Simplicity – setting up as a sole trade is inexpensive and easy with few forms to fill in. To start trading no specialist services are required. Only the setting up a bank account and advising the tax offices
- Profitable – as the owner, all the profit belongs to the sole trader
- Confidentiality – business affairs are private, competitors cannot see earnings and will not be able to determine how the business works and how it succeeds
To set up as a Sole Trader, you need to register your business name (if required on Companies Registration website), open your business bank account and register for tax with your local Tax office (for income tax and VAT). A good source of information on running a business as a Sole Trader is also available on the Revenue website.
What is a Partnership?
A partnership is very similar to a sole trader but shares control, responsibility and finances between two or more people. The partner or partners would take on full liability for any debts incurred by the business and all profits would be shared equally. Ordinary partners also take on equal responsibility and decision-making in the running of the business. There are advantages and disadvantages to entering into a business partnership.
The main advantages of setting up as a partnership are:
- Simplicity – Business partnerships are relatively easy to establish with little ongoing formal regulation. A partnership agreement should be drafted however and this process should not be rushed. Taking time in drafting partnership agreements will avoid future problems
- Funding – with more than one owner, the ability to raise funds may be increased
- Wider knowledge base – the business can benefit using the expertise and experience of all of the business partners
- Flexibility – the business can start as a partnership and then move to a limited company status at a later day if required
Contact me for more information on setting up in business as either a sole trader or a partnership, and, we look after all your tax needs allowing you to focus solely on your business.