INCORPORATION -v- NON INCORPORATION

We are often asked whether or not it is worth incorporating a business.

Reasoning and Background
There are merits in continuing as a Sole Trader / Partnership but also in becoming a Limited Company and as with all things there is an opposite to the advantages of incorporation.

Sole Traders and Partnership are the simplest way of operating a business, but all proprietors have unlimited liability to debts of a business and whilst the administration of the business is relatively easy the fact of unlimited liability remains.

Being a company may provide more reassurance to customers, suppliers and the public as well as the possible security to banks and other lenders / institutions. Forming a company also means that shares may be passed to different family members as ownership is identifiable and capable of being separated from the management and running of the business. The more traditional reason or benefit of incorporation can arise as the business grows, increasing profits can put proprietors into higher rates of tax. However, if proprietors do not need all the profits then that company becomes an attractive proposition.

There are many advantages and disadvantages in doing so as each business is unique. We can discuss the needs for incorporation in more depth in order to compare the costs and/or restrictions of incorporation

Contact us to arrange a discussion of the benefits that your business might gain.