The question of whether a business should be incorporated or not is one which comes up often, no more so than now, when tax rates are changing and everyone is looking for the most tax efficient way to run their business.
Incorporation is a big word but basically means that your business operates as a limited company as opposed to a sole trader or a partnership. Why should this matter? It can be advantageous from a tax point of view to be incorporated and with the small business corporation tax rate due to come down to 20% from April 2011, the advantages just get greater.
It’s not just about tax, though, so if you’re thinking about incorporation you should really get some good advice. There are reporting requirements for limited companies that don’t exist for other structures and personal and future plans should also be taken into account, together with legal liabilities.
What’s important is that you find a structure that fits your needs for now and for the future, so don’t just jump in with two feet until you have thought it through and got some good advice to make sure that you do what’s best for you.