Below are some other non-tax advantages of incorporation.
Normally operating as a company provides limited liability. If a shareholder’s shares are fully paid, he cannot normally be required to invest any more in the company, or be liable to company’s debts. However, banks would often require personal guarantees from the company directors for borrowings. The director is not usually liable to company creditors.
A company is separate from its owners (the shareholders) and will enjoy legal continuity as it is a legal entity in its own right. The company can own property, sue and be sued.
Transfer of ownership
It is easier to transfer the ownership of the business, in comparison to a business which is not trading as a limited company.
The corporate status is often deemed to add to the credibility or commercial respectability of the business.
Companies can usually borrow more against the assets of the business. This is possible as normally a bank is able to take extra security by means of a ‘floating charge’ over the assets of the company.
The company could establish an approved pension scheme. This may provide greater benefits than the self-employed schemes.
If your business is in Bromley, Kent and London areas, please contact us at Adiva Accountant in Bromley to discuss all the advantages of operating as a company.