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.

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Unless you strongly resemble those "other people," they're irrelevant.

6. "You will probably fail." Your advisor may be using fear to motivate you to work harder or sign up for his success course.

Here's a legend: "Maestro," says surgeon to famous musician, "I played for you at a master class. You advised me to stop playing professionally. You said I would never be great. I want to thank you. I listened to your advice and became a doctor." The maetro peers at surgeon: "I do not remember you. I tell all my students that. The great ones ignore my advice and continue anyway."

7." If you feel energized about your goal, you will be successful." Feeling energized just means you enjoy some aspect of what you are doing. Figure out what you enjoy and design a life to include more of it.

My old friend Richard was energized about his failing business for ten years of negative income. Last I heard he was with a temporary agency, paid hourly, holding on to title of "independent contractor."å

8. "You can always go back to what you were doing before." After months or years of trying to start a business, you and your former career will be different and your former colleagues will view you differently. Better to begin with a job that you can leave if you become successful. Stay in a position of power. 9." You have had a successful career so far and you'll figure out how to be successful now." Basketball players do not always thrive on football teams and baseball is a different game altogether. Enough said.

10. "You will be fine; you just need more confidence." If you lack self-confidence in several areas of your life, see a clinician. Otherwise your lack of confidence in your entrepreneurial skills is probably reality-based and should be viewed as a signal to find another advisor.