Business Start Up Basics

Business Start-up

Delaney Corporate Finance
Corporate Finance & Business Support Services

Who am I?
 Chartered Accountant
 Advise companies on finance and strategy
 Provide management support
 I’m a start-up!

DELANEY CORPORATE FINANCE 2

What business structure ?
Company
 Separate legal entity
 Minimum requirements:
 1 shareholder; 2 directors; 1 secretary (can be a director)
 Limited liability, though in practice Personal Guarantees are often
requested
 Directors have duties and responsibilities and failure to meet these
has legal consequences (e.g. Negligent or fraudulent trading)
 Pay particular attention to directors loans
 Small companies no longer need an audit
 Must file an annual return, hold AGM etc
 For further info see Companies Registration Office (www.cro.ie)


Partnership
 Not a separate legal entity and governed by some
pretty antiquated law (1890 & 1907)
 No particular minimum requirements
 If no partnership agreement courts refer to
Partnership Law
 Limited (unusual) and unlimited partnerships
 At least 1 partner must be unlimited


Sole trader
 Just you
 If not trading in your own name, must register a
business name (www.cro.ie)
 Not a separate legal entity so you’re liable for debts


Agreements
 If in business with someone else have a partnership or
shareholders agreement:
 Sets out how the business will be run
 Information flow and meetings
 Roles, responsibilities, rewards
 Raising finance
 Exits and new entrants
 Dispute resolution
 Do it now when everyone is still friends.


Taxation
 Company: Company is taxed and you are taxed if you
take a salary or a dividend i.e. potential double
taxation. There are benefits however:
 Certain specific reliefs (BES etc)
 Wealth accumulation and inheritance
 Sole trader: Taxed on all income even if not drawn
 Partnership: Taxed on share of income even if not
drawn


Funding
 Own equity
 Social Welfare (Enterprise allowances)
 3 F’s
 Grants (many providers)
 Competitions
 Outside equity (PE and VCs)
 Taxed based (BES, Seed Capital)
 Banks/Credit Union ????????


Funding
What you need:
 Robust proposition
 Proven market and product/service offering
 Ability to deliver (set your milestones and deliver)
 Business Plan


What do the Banks want?
 Security
 Security
 Security
 Security
 Security
 Interest cover and repayment cover


Keeping the Bank happy
 Regular updates
 Robust and transparent financial information
 Milestones being achieved
 Good news stories not just financial
 Their money back!


Taxation
 Registering for tax
 Form TR1 or TR2 (corp)
 Income tax/Corporation tax
 PAYE – if you have employees (incl. yourself, if a
company)
 RCT – certain activities – largely construction related


Taxation cont
 VAT
 Income greater than €37,500/€75,000
 Cash receipts v accruals basis
 Various rates: 21%; 13.5%; 9.5%; Zero; Exempt (NB zero v
exempt)
 Beware own usage
 A costly tax to get wrong as transaction based
 Get advice upfront


When to pay tax
 ROS (Revenue Online Services) is useful
 VAT: 2 monthy returns and payments + 1 annual return
 PAYE/PRSI: Monthly
 RCT: Monthly
 Income Tax: preliminary and final in October
 Corporation tax*:
 Preliminary: 1 month prior to company’s year end
 Balance: 9 months subsequent to year-end
*small companies i.e. Profit<€200k


When to pay tax
Start up reliefs
 Corporation tax *– no preliminary tax in year 1
 Income tax –
Year 1: profits to 31 December
Year 2: First 12 months profits
Year 3: Profits for accounting year ending in Year 3

If year 3 treatment results in excess tax paid over what would have been paid on a actual
basis, one can claim excess relief.

Losses
 Can be carried forward or offset against other income (with restrictions)

Redundancy
 You can reclaim PAYE paid

*small companies i.e. Profit<€200k


Taxation information
 Sources of information:
 www.revenue.ie (in particular (IT48, VAT Guide)
 Professional service firms websites
(accountants/lawyers)
 Your local friendly accountant


Record keeping
 DIY or Accountant?
 Computerised:
 Traditional: Sage, TAS, Quickbooks, Big Red Book
 Cloud based: Sage One, Xero, Kashbook
 Manual
 Ledgers
 Spreadsheets
Keep it simple but organised – see examples in IT 48


Your Business Plan
 Use it Don’t lose it
 Not just for outside parties
 Track performance against milestones – not just
financial
=> stay on track
 Good motivator either as clap on the back or a kick
 Will evolve and change – financials and marketing


Marketing
 Have a plan
 Know what your selling
 Don’t be shy: Tell everyone you’re in business
 Lots of free advertising opportunities:
 Social media: Facebook; Linkedin; Twitter
 Press: Local area profiles; trade magazines
 Competitions and awards (e.g. Chamber awards; trade
awards)
 Website (consider Google places, adwords, QR codes)


Other nuggets
 Never a bad time to go into business. Its up to you and
your frame of mind
 Funding isn’t everything. There are ways
 Be prepared for a bit of an emotional roller coaster
 Don’t be afraid to ask for help – network
 Skill up


My experience ?
 Great
 No one else to blame or take credit
 New business can come from surprising sources and
not always from where you expect it
 Give yourself time but hit those milestones!
 Plenty of people willing to help


Contact
George Delaney
Delaney Corporate Finance
The Rising Tide Centre
35 South St
New Ross
087 6299317
george@delaneycorpfin.com
www.delaneycorpfin.com


Business Start Up Basics

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