Start-up formalities
This Start-up formalities Info Guide covers start-up formalities.
Reputable professional advisors can make an invaluable contribution to the long-term success of your tourism business. Choosing the right advisor is essential to establishing a lasting professional working relationship.
Accountants provide a range of business services that can assist you in running a profitable business. Services offered include the following:
- General book-keeping
- Accounts preparation
- Raising business finance
- Preparation and filing of Revenue tax returns
- Payroll services
- Audit of accounts
- General business advice
Chartered Accountants Ireland (http://www.charteredaccountants.ie) is the largest and longest established accountancy body in Ireland.
Professional legal advice can assist your business in such areas as purchasing premises, negotiating contracts and employment law issues. The Law Society of Ireland (http://www.lawsociety.ie) is the professional body that governs solicitors’ practices.
You will need an architect if you are planning to modify an existing building or to build a new one. The representative body responsible for professionally qualified architects in Ireland is the Royal Institute of Architects of Ireland (RIAI) (http://www.riai.ie)
You will need a surveyor to affirm the condition and market value of any property you are considering purchasing or leasing. The Society of Chartered Surveyors (SCS) (http://www.scs.ie/home) is the professional body for Chartered Surveyors practicing in Ireland.
eCommerce is a useful tool in the tourist industry, as it provides a direct link to your customers. An IT consultant can pay a vital role in helping you utilise this medium.
Various industry professionals are available to assist you, including:
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There are two types of legal structure that are relevant to tourism businesses - the Sole Trader and the Limited Liability Company.
Sole Trader
The main advantage of operating as a sole trader is that you own the business and do not have to share profits with others; however, funds available to you may be limited and you will have personal liability for all business debts.
Limited Liability Company
The main advantage of a limited liability company is that you have limited personal liability in respect of the debts of the company.
However, there is a greater administrative burden on a Company (e.g. filing of information at the Companies Office, separate Company tax returns). Lending agencies may seek personal guarantees from you as additional security for loans advanced to the company.
When considering the different types of legal structure, it is advisable to seek advice from an accountant and / or solicitor to ensure you make the right decision.
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Registration of a business name is required when any individual or company carries on business under a name other than their own true name. Registration for an individual is required if they use a business name which differs in any way from their surname, eg registration is required if Ms. Jane Smith traded as Smith’s B&B, but not if she traded as Smith or Jane Smith. A company must register its business name if the name under which it trades is in any way different from the name under which the company is incorporated.
Business names must be registered with the Companies Registration Office within one month of commencing to use the name. Details of the procedure and fees for registering a business name are available from the Companies Registration Office at www.cro.ie.
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It is essential to set up and maintain proper accounting systems and procedures to monitor and control the business’s financial affairs. At a minimum, books of account should include the following:
- An analysed record of sales from invoices issued, till rolls, or other records of sales made – date, details, amount and VAT charged.
- An analysed record of purchases – date, details, amount and VAT.
- An analysed record of receipts and payments to allow for regular reconciliations between the business accounts and those of the bank.
- A record of amounts owed to the business (debtors) and owed by the business (creditors). An account should be kept for each supplier / customer to allow the business to track and monitor dealings on each account. Creditor statements should be reconciled monthly.
- In the case of employers: details of gross pay, tax and PRSI deducted for each employee, and amounts due and paid to the Revenue.
- General/nominal ledger to summarise the above records and facilitate the preparation of periodic accounts (the Profit and Loss Account and Balance Sheet).
Remember!
- Accounts should be prepared, ideally monthly, so that business performance can be monitored.
Accounting records may be maintained manually if the operation is small.
- There are many commercial accounting software packages available that will automate most of the accounting records and production of financial reports and accounts.
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Details of how to register for taxes are provided on the Revenue Commissioner's website at www.revenue.ie
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It is essential that you open at least one business bank account. When choosing a bank, ensure that you build a good relationship with them, as it is likely to be a crucial relationship.
Remember!
Your bank needs to understand your business and your requirements.
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Once you have chosen a bank, the three steps in setting up a business account are as follows:
- Gather together the appropriate documentation required by the bank (for companies, this will include Original Certificate of Incorporation and the Memorandum and Articles of Association).
- Complete the relevant application form (usually available online)
- Provide two forms of identification from at least two directors of the company (passport or drivers licence, and a recent bank statement or utility bill as proof of address).
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The main types of insurance are:
- Public liability insurance
- Employers’ liability insurance
- Insurance against fire and theft
- Motoring insurance
All of the major insurance providers provide risk management programmes that are tailored to meet the needs of the tourist industry business. Like the banking sector, the insurance market in Ireland is a highly competitive marketplace. It is worthwhile negotiating with the different insurance providers or engaging a broker to ensure the best rates and coverage.
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Legislation that may impact on a tourism business in Ireland include the following:
- Health and Safety Acts
- Tax Law
- Licensing Law
- Requirements regarding accommodation registration and standards
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