CHECKLIST
Am I Ready to Go Limited?
A checklist of signals rather than a list of tasks, including the five reasons people usually give that no longer hold. About an hour, and it may well tell you to stay exactly where you are.
- Signals for, signals against, and the myths
- The arithmetic behind every claim, at three profit levels
- Written to give an honest answer, not to sell you a company
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Who this checklist is for
Anyone who has been told they should incorporate, or has been wondering, and would like to work it out from signals rather than from a rule of thumb that stopped being true.
Sole traders being told to incorporate
Section two takes the five reasons people usually give and shows what the arithmetic actually says about each. On current rates a sole trader at £30,000 keeps £1,064.75 more than a company owner extracting the same profit.
Sellers reinvesting in the business
This is the signal that genuinely counts. Leave profit inside a company and only corporation tax applies, which at £120,000 of profit is a deferral of £18,670.56.
Company owners who have not looked since
Six rate changes have gone against company owners recently. If you incorporated on the old advice and never revisited it, the same checklist works in reverse.
FACTS
The signals that actually point to a company
Retention, liability, pension contributions, and a plan to sell or bring someone in. Eight of them, with the strongest named as strongest rather than buried in a list.
34 signals
For, against, and neither
3 profit levels
Arithmetic, not rules of thumb
FACTS
The reasons that no longer count
Passing £30,000, wanting to pay yourself in dividends, looking more professional. All of them common, none of them a reason on its own, each one shown against the numbers.