Do you want to take to the ridge line yet?
While there are undoubted benefits from incorporation whether the limited liability of the owners or the tax benefits a recent statistic brought me up short. While setting up a new company I looked at the stats of companies I have set up in the past 4+ years and was surprised to see that 25% of the companies set up had ceased after a short period and the owner had returned to paid employment which is interesting in a time of high unemployment.
There are various reasons for this including:
Difficulty of obtaining mortgages as an business owner as opposed to employee
Received an offer which despite lower earnings had job security and other benefits such as pensions
Or just found it too tough to obtain work and make “good money” as a business owner
Or stick to the easier path of self employment?
Having spent some time in Snowdonia recently and experienced true fear when scaling a ridge line I thought this bore some relation to setting up a company which is not an inconsiderable task if not in cost, certainly in time. If you are considering setting up in business I would certainly now be advising clients to look at the option of a period of self employment prior to setting up a company as this is an easier path to tread than heading straight for the ridge line. On a positive note it appears in the current recessionary climate that there are still jobs for “go-getters” who can at set up and run their own business even if only in the short term.
There are definitely benefits in incorporating but consider whether you would be better off trading as a sole trader in the short term. This only covers a small number of matters to consider so please seek professional advice before taking any steps based on the information shown. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”