A business may commence as a sole trader and carry on successfully using this business model. The business may mature and outgrow the sole trader as a vehicle for doing business.
High personal tax, PRSI & Universal Social Charge has made it attractive to incorporate a trade into a limited company. A corporate structure provides the lower rate of Corporate Tax and access to substantial pension benefits to the owners of a business. This option is not without it’s tax implications. Capital Gains Tax & Stamp Duty must be considered on the value of the business assets being transferred to the limited company. Relief from Capital Gains Tax may be applicable subject to satisfying the requirements under Tax Law.