Determine your legal business structure

After you’ve conducted the initial planning exercises, you must decide how your business will be legally structured. This will determine how it is treated for legal and tax purposes.

There are several legal business structures to choose from, each with their own advantages and disadvantages. These structures include sole trader, partnership and Limited Liability Company.

Information on the types of business structure and their legal and tax implications is available through the Companies Registration Office or in guides published by the major banks and State agencies.

Once you’ve decided what type of business you will register as, you must officially register your business name and/or company.

Registration is completed through the Companies Registration Office. You will also need to register for VAT, PAYE etc. (see below).

Before you open your practice, you’ll need to determine how much finance you’ll need for start-up costs and initial operating expenses before you start receiving payment for consulting assignments.  You will also need working capital as your practice expands. To assess this, you could construct a simple, spreadsheet-based set of monthly projections covering, best, worst and most likely outcomes for one to two years ahead.

Finance for your business can come from two sources: equity and debt. Equity can include personal funds or finance from external investors, who will most likely look for a shareholding, if a limited company, or a return on their investment.  Debt is money borrowed from a bank or financial institution at a price, usually interest and /or fees.

Since your practice will be considered a start-up organisation, you may be entitled to free or discounted services and support from a variety of State agencies.

Enterprise Ireland and Local Enterprise Offices offer detailed information on starting a business in Ireland.

Information about financial supports for Irish businesses can be found here.

You will need to open a business bank account through which all business-related funds will be routed. Additionally, depending on your financial needs, you may need to open lines of credit to fund your business, especially in the early days. Financial institutions will require sight of your business plan to set up credit arrangements.

On starting your business, you are required to register and pay taxes – mainly for PAYE/PSRI, VAT and Corporation Tax.  All of these can be paid online using the Revenue Online Service.

For information on tax registration click here. Additional information is available in Revenue’s Starting in Business Guide.

As an independent consultant or a consulting practice owner, you may wish to secure insurance, including professional indemnity insurance, to protect against the various risks associated with business consulting.

The IMCA has negotiated a very attractive deal on professional indemnity insurance with Towergate Professional Risks, and on car / home / office insurance with Glennons, the savings on which can exceed membership fees. Additional information is available here.

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