The answer is that from a tax point of view, it is advantageous to trade through a limited company as long as income is drawn from company by owners as dividends from their shares and amount of dividends drawn is restricted below 40% band rate (i.e. œ31,063 for tax year 2002/03). That way, owners have no further personal tax ("income tax") to pay. Moreover, dividends are not subject to national insurance contributions. This is excellent news of course. But, if dividend income falls within higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% on excess, which of course will increase tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is when director takes his reward from company as salary. Then his/her salary is taxed at income tax rates (like a sole trader's income). That is because, unlike sole traders, tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is that income taxes are higher than corporation tax rates. On top of that, they will be subject to employee and employer national insurance contributions, which of course increase tax burden and render his position worse than even an unincorporated business ("sole trader"), because NIC Class 1 on payroll are higher than NIC Class 2 paid by self employed.

In contrast, a self employed person ("sole trader") is taxed at income tax rates on profits from his business, which are added to his other sources of income. As it has already been mentioned, income tax rates are overall higher than corporation tax rates. On top of income tax, national insurance contributions class 4 are payable on business profits within a specified band (7% on profits between œ4,615and œ30,420). National insurance contributions Class 2 are also paid by self-employed people, although those are lower than those payable by company directors on their salaries.

To illustrate above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each in tax year 2002/03. We assume that company director takes a salary equal to amount of his personal allowances (untaxed income) of œ4,615 and balance as dividends. The company will pay corporation tax at 19% equal to œ10,523 and nothing else. The sole trader will pay income tax œ16,542, National insurance Class 2 œ104 and National insurance Class 4 œ1,806. Total œ18,452. The bottom line is that person that has incorporated his business into a limited company will make a tax saving of œ7,929 compared to a sole trader! Isn't that fantastic?

Somebody might be wondering: why is this entire happening? The official explanation is that, this government, to help economy grow, encourages people to leave as much profits within their businesses to be reinvested, instead of being taken out and spent.

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Just how difficult is it to develop and promote a domain that will rank on page one or two of all majors?

Well...like anything, that depends upon many factors.

You can buy your way to top, of course, with pay-per-click SEs. That can get very expensive, and may well be beyond a person's budget. At moment, however, there aren't too many pay-per-click SEs. (You can expect that technique, just quietly, to grow and get more expensive.)

You can get what's called a "sponsored" listing to appear at top (or side) of page one when certain search terms are entered. That can cost, too.

A lot of sites, I'm told, resort to cloaking techniques i.e. presenting a certain page to each SE and then redirecting prospect to real page. SEs don't like that, I'm also told, and rightly so. When, f'instance, was last time you looked in your Yellow pages for a certain business, called it on 'phone and then found out that you were connected to something entirely different?

You wouldn't stand for that, nor would I. Nor would anybody. Ditto SEs regarding cloaking (although, just quietly again, I understand that there are inherent problems in exposing those who cloak).

On other hand, appropriate advertising is good - good for you and me, good for business. Too much, from same source however, is tiresome. It batters senses, sometimes to stupefaction, almost. Many sites seem to revel in that, with hundreds of doorway pages in areas you would not suspect, yet which lead you to same old stuff.

Spammers delight in that tactic, so I understand, but SEs are developing techniques to root them out. And so say all of us, right?

So, let's put aside cloaking and zillions of cloned pages...bandwidths shouldn't be burdened with bandits, right? ;-)

So...getting back to question: just how can any regular Joe or Jane develop a website that will rank high, without resorting to trick or treat tactics (or sponsored / pay-per-click payments)?

Actually, it's easier than you think - provided certain limitations are recognized and accepted: