Starting Your Business - The First Steps

So you've decided to start your own business, or are thinking about dong so. At this stage you might be worried about what's involved, but you needn't be too concerned; the process is fairly straight-forward and we'll walk you through it step-by-step below.


What type of business? Registering your business Funding Tax Health and Safety Miscellaneous Items Further Reading

What type of business?

The first step involved in starting your business is deciding what type of business it'll actually be. There are three choices available to the individual here: setting your business up as a sole trader, as a partnership or as a limited company. The type of structure you choose depends on the kind of business you are running, with whom you will be doing business, and your attitude to risk.

Sole trader - Probably the most straight-forward option, it is relatively simple to set yourself up as a sole trader but if your business fails, your personal assets could be used to pay your creditors. The main legal obligation is that you must register as a self-employed person with the Revenue Commissioners. If you wish to use a business name, as opposed to simply operating under your own, you must register that business name with the Companies Registration Office (CRO), a process which will be discussed further below.

Partnership - This option involves two or more people agreeing to run a business in partnership with each other. The partners are jointly responsible for running the business and if it fails all partners are jointly responsible for the debt. The Citizen's Information Board also recommends having a solicitor draft the partnership agreement for parties going down this road.

Limited company - The last option, setting your business up as a limited company has some advantages. Limited companies are considered separate legal entities, so if the company gets into debt, the creditors generally only have a claim on the assets of the company. A limited company must be registered with the Companies Registration Office (CRO), and the company reports and accounts must be returned to the CRO each year.

Given the potential legal ramifications involved with your choice, it is advisable to get the advice of a solicitor and/or accountant when considering the structure for your business. You can also look at and this article on the Citizen's Information website for more information.

Registering your business

If you decided to start a limited company, the next step involves registering it with the Companies Registration Office (CRO). This link will give you a basic overview of the different types of limited company you can create, as well as other information about starting the registration process. If you register online, using the CORE system, the fee for registering your company is €50; if you do it via paper application, then it's €100. Generally, you would be advised to submit as much paperwork online as possible; most fees are reduced, and quite a few are free. A full list of the different fees associated with submitting paperwork to the CRO can be found at this link.

Alternatively, you may have decided to operate as a sole trader. If you decide that you want to operate under your own name, you don't need to do anything with this step. If, however, you want to use a business name then you have to register it with the Companies Registration Office. Again, the link to find out more information and start the registration process can be found here.


Given the importance of the topic, and the number of different options available, the subject of funding is covered separately here.


Now on to everyone's favourite topic, dealing with the Taxman. In this section we'll quickly run through what types of tax you do and do not need to register for, and pay, along with providing the necessary links.

  • Income Tax - Registered for using the TR1 for sole traders, or TR2 for companies. The Revenue has a page discussing registration here.
  • PAYE & PRSI - In terms of PRSI, self-employed individuals (sole traders, owners of single person limited companies, etc.) are classified as Class S social insurance contributions. A guide, written by the Department of Social Protection, can be viewed here.
  • VAT – One thing many people don't know is that you don't immediately have to register for VAT if you don't want to. You only need to do so if you cross a sales threshold of €37,500 for services or €75,000 for goods (depending on what it is that you're selling).
  • Corporation Tax – The two rates of corporate tax are 12.5% for trading income, and 25% for non-trading income (i.e. investment income, rental income). At present (May 2014), there is a three year corporate tax exemption for new start-up companies, on trading income and certain other gains. Here you get full relief on income and gains relating to the company’s trade where total corporation tax liability in any of the first 3 accounting periods does not exceed €40,000; i.e where the net income of the company is €320,000. In addition, there is marginal relief where the tax liability falls between €40,000 and €60,000, i.e. where the company net profit is between €320,000 and €480,000. See here and here for more details.
  • RCT - Relevant Contracts Tax, applies to payments made by a principal contractor to a subcontractor in the construction, forestry or meat processing industries.

Additionally, you will also need to keep accounts which record all purchases and sales of goods and services, as well as all amounts received and all amounts paid out, along with supporting records such as invoices, bank and building society statements and receipts.

Additional articles, such as this one by the Citizen's Information Bureau, and this one by, might also be of help.

Health and Safety:

One thing that not many people realise is that with current legislation, all employers, including self-employed people, need to have a health and safety assessment/statement for their businesses. Information from the Health and Safety Authority (HSA), can be viewed here, here, and here. Further information, by the Citizen's Information Bureau and can be viewed here, and here.

Miscellaneous Items:

  • Insurance - Though not a legal necessity, it it generally advisable to have insurance cover for various situations, such as public liability insurance, if the public have access to your premises. The Irish Insurance Federation provides a free information service where you can obtain information and advice on insurance.
  • Planning Permission - If you are working from home you may need planning permission, for example, if you are using part of your home for business purposes, or if you were to build a shed or an office in your garden. Your best bet here would contact your local authority for advice about it.
  • Business Licences - Certain types of businesses will require additional licencing, such as food or haulage businesses for instance. A complete list couldn't be found online, but a call to your Local Enterprise Office should inform you one way or the other.

Further Reading:

At this stage you've probably read, or skimmed through, the above material. If you'd like some more information, then the following links will hopefully prove helpful.

  • Becoming self-employed – Article by the Citizen's Information Bureau about setting up your business as a sole trader.
  • Setting up a business – This is one of the articles linked to previously, but I've included it again here as it's very useful to refer to.
  • Starting a business – A guide by the Local Enterprise Office, similar to the previous link. It should be noted that this link is for the Dublin Office, so anyone in a different part of the country will need to find the contact details for their own local office here.
  • Starting a business - Another guide to starting your business, this one by
  • Generic Regulatory Requirements for Establishing a Business - Brief guide to tax and business name registration by
  • Registering as a Sole Trader - A guide by Seamus Parfrey, of Parfrey Murphy Chartered Accountants. They also seem to have other useful articles on their site that might be worth looking at.
  • Registering for Tax - A guide to tax registration by the Revenue.
  • Tax for self-employed people - A guide by
  • Closing or selling a business – Article by the Citizen's Information Bureau, about the processes involved with either selling or winding up your business, whether it's a limited company, or you're a sole trader.
  • Self-employed and unemployment – A brief guide by the Citizen's Information Bureau on your entitlements (i.e. Jobseeker's Benefit, Allowance, etc.) if you have to wind up your business.
  • Toil & Trouble – Don't let the name put you off. This is a very useful 108 page book written by Trevor Topping, for the Department of Social Protection, that will walk you through the whole process of becoming self-employed. PDF Link.

The best thing I can advise is that before you actually do anything, look through as much of the above material as you can, and then try and talk to someone in your Local Enterprise Office and/or an accountant about the various pros and cons involved in both becoming self-employed, and in choosing a particular type of business structure. Though it's quite long, Trevor Topping's free book is an excellent resource to run through, and will answer many of the questions you might have.