Incorporating Your Accounting Practice

Incorporating Your Accountancy Practice

2011 has seen a number of progressive accounting firms incorporate their practices following the removal of the company law prohibition on a statutory auditor being a ‘body corporate’ (Statutory Instrument, SI 220 of 2010, European Communities (Statutory Audits)(Directive 2006/43/EC) Regulations 2010).

Commercial and Personal Benefits

A number of commercial and personal benefits can be achieved by incorporating your practice. These include:-

• limitation on personal exposure to creditors;
• avoidance of joint and several liability among partners;
• access to cheaper working capital;
• greater asset protection; and
• enhanced personal tax, pension and financial planning opportunities.

Issues to Consider

Whilst the process would appear to be straightforward, in practice the steps are complex and there are several key decisions that need to be taken.

These include:-

• Ensuring that structures chosen adequately meet regulatory and company law requirements;
• Structuring the transfer to avoid goodwill at 6% on the value of goodwill;
• Giving consideration to the need for new legal agreements to enable future succession within the business; and
• Having an independent valuation for the purpose of a Revenue audit.

How Can we Help

We have unique experience in Ireland in the areas of practice regulation, valuations, tax and legal planning.

Our experts offer a range of support services in the following areas:-

Practice Support

• Valuation reports for accounting practices;
• Advice on regulations, and regulatory considerations including applications for the new entity, control requirements, surrender of existing registrations, and professional indemnity insurance, to name a few examples; and
• Assistance in relation to multi-partner firm and succession issues.

Taxation

• Advice on avoidance of stamp duty at 6% on the transfer of goodwill and other intangible assets (which cannot be avoided by ‘passing by deliver’);
• Implementation of ‘cash extraction’;
• Guidance on access to CGT and VAT reliefs;

and

• Negotiation with Revenue regarding valuations;

Company Secretarial

• Incorporation of new company;
• Drafting a tailored Memorandum & Articles of Association to comply with Institute Regulations;
• Designing share rights to reflect them entitlement of different stakeholders in the business; and
• Drafting and implementing shareholders agreements.

Contact us today to find out how we can assist you incorporate your accountancy practice.