A sole trader is the simplest form of business to establish. The danger however if you choose to become a sole trader is that you, as the business owner have unlimited liability, that is if any debt accrues on the business, you will have to pay them with your own assets. The company is not a separate legal entity.
Setting Up a Sole Trader Business
In order to establish a sole trader business in Ireland there are a few steps you must follow.
Firstly you must register your business name by filling out form RBN1 on the Companies Registration Office (CRO) website.
Once you have received your certificate of business name, you must then acquire a business bank account. This is necessary to keep your personal income separate to your businesses. You must have your certificate of business name to open this account if the business name is to appear on the cheque book and banking accounts.
If you are running a sole trader business, you are regarded as being self-employed. If you are self-employed in Ireland you must register with revenue that you are a self-employed sole trader. To do this, you must fill out form TR1 on the revenue website. If you are required to do so, this form is also used to register for VAT. Tax as a self-employed person is calculated by the self-assessment system. You must keep adequate records of your income throughout the year to allow you to fill out the tax return in time.