Quick answer: A sole trader operates personally and uses their own PPSN as the Tax Reference Number once registered for tax. A limited company is a separate incorporated entity, registered with the CRO and given its own company and tax registrations. The better option depends on commercial, tax, legal and administrative factors.
Reviewed: 14 October 2026. This is general information and not a recommendation for a particular business structure.
Reviewed by Saiful Alam Sabuj M.
ACCA-qualified · Managing Partner and Accountant at Stratancy Consulting
Sole trader and limited company at a glance
| Area | Sole trader | Limited company |
|---|---|---|
| Legal form | Individual carrying on the business personally. | Separate incorporated company. |
| Registration | Register for tax with Revenue; a business name may also require CRO registration. | Incorporate through the CRO and then complete relevant Revenue tax registration. |
| Tax return | Normally Income Tax self-assessment where applicable. | Company Corporation Tax filing, with separate personal tax considerations for directors/shareholders. |
| Annual company filing | No company B1 annual return. | CRO annual return and company-law obligations apply. |
| Accounting administration | Usually simpler, but business records still need to support tax returns and VAT/payroll where relevant. | More formal accounting, company records, statutory accounts and corporate compliance. |
Registering as a sole trader
Revenue requires a person who becomes a sole trader to register for tax. Once registered, the person's PPSN becomes their Tax Reference Number for the business. If a sole trader uses a business name that is different from their own name, that business name may also need to be registered with the CRO.
Registering a limited company
A limited company is incorporated with the Companies Registration Office. The CRO states that incorporation applications are made using Form A1 and a constitution through CORE. The company then has its own ongoing company-law and tax obligations.
Which structure has more administration?
A limited company normally has more formal administration because the company itself has statutory records, annual CRO filings, company accounts and Corporation Tax obligations. A sole trader does not have those company-law filings, but still needs accurate bookkeeping and may have Income Tax, VAT, payroll or other tax obligations.
Is a limited company always more tax efficient?
No. A company and a sole trader are taxed differently, but the overall result depends on profits, how money is taken from the business, other income, pension planning, payroll, future plans and other circumstances. The structure should not be chosen from one tax rate in isolation.
Questions to consider before deciding
- How much profit do you expect the business to generate?
- Will you need to take most profits personally each year?
- Will you employ staff or pay a director through payroll?
- Do clients or contracts prefer a company structure?
- Will there be co-owners, investors or future share ownership?
- How much ongoing administration are you comfortable managing?
- Are there legal or commercial reasons to separate the business from you personally?
Official sources
Starting a limited company?
See the company setup service and our detailed formation guide.
Company Setup Services →Operating as a sole trader?
See personal tax and Form 11 support for self-employed individuals.
Personal Tax & Form 11 →Choosing how to operate in Ireland?
Tell us what you do, expected turnover, whether you will have employees or co-owners, and how you expect to take income from the business. We can help you identify the accounting and tax questions that should be considered.