IRISH BUSINESS LAW
Starting A Small or Home-Based Business
Before starting a home-based business and deciding on a location, you'll want to make sure that your new venture complies with all local laws and ordinances. Some matters you'll want to consider are: financing; market surveys; insurance; planning; taxes; permits; and licenses.
Insurance Coverage
Your insurance is extremely important. In addition to sufficiently protecting your business equipment and assets, you must also ensure that you have adequate liability insurance coverage for people entering your home and for the products and/or service you provide.Many homeowners' policies require you to disclose when you start a home business. It's best to be upfront with your insurance agent and pay whatever additional premium is necessary in order to be properly covered. If you do not have sufficient coverage in place, then you are effectively self-insuring and that could be an absolute disaster for you and your family.
Planning Restrictions
While your town or city may not have restrictions on home-based businesses, you should read your local ordinances to make sure. If, after reading your local zoning laws, you are unable to tell whether or not your business would be allowed, feel free to call your planning office. Without giving them specific details about your business, ask about the rules regarding your general area of business. As a general rule of thumb you can be sure that any change in use of a residential property requires permission from the planning authorities. If you intend to convert a garage or build an extension, you definitely do need permission. If the nature of the business is such that there is very little traffic coming to the house it is likely none of the neighbours will bother you.
Licenses
You need to decide how you're going to operate your business, ie, as a Sole Trader, Limited Company, Partnership, etc. Depending on your decision, you may need to register your business. Please check out the Companies Registration Office (CRO) web site for more details. If you profit from your business and don't pay these taxes as you go, you could be subject to back penalties and taxes.
Taxes
If you are coming from the PAYE sector then you will be used to having your taxes automatically deducted from your salary. When you are self employed you no longer have that comfort and will need incur this responsibility yourself. So remember, be meticuluous records and hire a reputable accountant to help you. Also, remember, you probably need to register for VAT and again, you must be meticulous in your record keeping. The last thing you need is to incur the wrath of those wonderful people in the taxation departments.
Financing
It is not a secret that small businesses fail at a very high rate – usually within the first year. The business failure is very often a result of under capitalization. So, first and foremost, draft a realistic business plan. Then, take off those “rose coloured glasses” and be fully and brutally realistic in your projections. Your Bank Manager will be a very important person in your life and he or she will require a realistic business plan before agreeing to provide financing. You may be required to provide collateral for any loans and financing and very often this is your house. Beware, h, and think carefully before using your home as collateral – you don't want to jeopardize yourself and your family.
A few tips
· Think before you leap into business
· Ensure your spouse or partner is fully in agreement with your decision
· Do your homework
· Make sure you have sufficient financing
· Put some money away for the ‘rainy day'
· Be prepared to spend the amount of time necessary for business
· Always make time for your family
· Be honest in all your dealings
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The solicitors at Damian Nolan & Co.,
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have more than 40 years of combined experience
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