Aren't there any other matters to consider in deciding whether to incorporate or not?

Higher administration costs to comply with company law, payroll and bookkeeping is one factor. Another issue is pension planning. Extracting profits out of company as dividends rather than salary means that there will be no "net relevant earnings" and therefore pension contributions can't be made. But advent of stakeholder pension plans has meant that contributions up to œ3,600 per year can be made without need for any earnings. If a person does not wish to transfer funds in existing plans into stakeholder because of high charges, there is a way out: best net relevant earnings (i.e. salary) in five consecutive years can be used for making contributions for next five years, even if there were no salaries in remainder four years. It is comforting to know that entitlement to basic state pension is not affected by taking a salary from company at level of a person's personal allowances i.e. œ4,615.

Furthermore, an individual may decide not to bother with pension plans and instead invest in ISA. Often, these can be more efficient than pensions but that's beside scope of this article. If that option is taken, no salary is necessary.

Another factor is business motoring. It might be tax advantageous for an unincorporated business that owns many cars not to incorporate because if these cars have some private use there will be benefits in kind taxed on users. These are generally higher than straight apportionment between private and business for all car running costs in case of sole traders.

The conclusion is that there can be considerable tax savings waiting sole trader who decides to go down road to incorporation. But, one needs to proceed with caution and careful planning. And don't forget biggest advantage of incorporation, which is Protection from Personal Liability. Incorporating is one of best ways to protect a business owner from personal liability. Shareholders of a company are generally not liable for obligations of company. Creditors of a company may seek payment from its assets, but not assets of shareholders. This means that business owners may engage in business without risking their homes or other personal property.

Thank you for taking time to read this Article. I hope you've found it useful. If you have, please drop me an email and let me know what you think.

You can email me at...

constantinesavva@accamail.com

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#6 The People who know what they need but won't get it

For years, I've been advocating that if people want to succeed online they need things like their own domain, a listserver so that they can communicate with their prospects at touch of a button, a sales manager so they can handle all prospect follow up, etc. These investments are minor and they're essential for online success. However, time after time I encounter wiseguys who think they can succeed without having or using any of necessary tools. Usually in hot pursuit of latest "get rich quick" scheme, these puppies are determined to achieve success without bothering with any of necessary success tools.

#7 Newbies who know it all

Since 1993 I've been slogging daily on 'net helping to build a worldwide business at http://www.worldprofit.com I've never allowed myself arrogance of thinking I know it all; indeed, I've been humbled by how much there is to learn online, approaching problem of mastering it one step at a time, one day at a time. It's exact reverse of hotshot know-it-alls who have been on 'net 5 minutes, know everything, and dismiss notion that there may actually be something they don't know with an irritating wave of hand. "What me work?," they seem to say. These people are frequently young, male, and often make me want to take a long, hot bath after encountering them to rinse off stench of stupidity and irresponsibility they emit.

#8 People who lie about money

The biggest tabu of our times is not sex, but money. In our culture, money and what it buys defines who we are. To increase our perceived standing either means getting more money -- or lying about what we've got. The Internet, with all its anonymity, has made it easier to lie about money. People lie at drop of a hat about what they want and their ability to pay for it. People think nothing about lying; they see no negative consequences to whatever they say and so carry on merrily saying whatever comes into their heads, no matter that not a single word of it is true. To counter this trend, business people like me have to assume that every single person we encounter is a liar until proven otherwise. We have to run our businesses from a defensive posture, wondering who will do what to threaten stability of our enterprise. Only naive and foolish approach people as if they are honest, reliable, credible, and trust-worthy. The rest of us have to live each day in a state of permanent wariness. It's a helluva way to live, but necessary to online business success.

Well, there I've said it. There's more, of course, that needs to be said about people who make doing business online unnecessarily difficult and unpleasant, but that's enough for today. If you see yourself in what I've written, DO SOMETHING ABOUT IT. Bad behaviors are not set in cement. I guess I'm still optimistic enough to think that if one sees them and understands them, one can change them. Right? Or am I being naive?