If you incorporate your small business, you can determine when and how you receive income from the business, which is a real tax advantage. Instead of taking a salary from the business when the business receives income, being incorporated allows you to take your income at a time when you’ll pay less in tax.

These four facilities are known as four effects of incorporation. These four effects are: i) The company becomes a legal entity distinct and separate from its members; ii) It can sue and be sued in its own name; iii) It can own and sell property and iv) It Enjoys perpetual succession.

After the company has been incorporated the newly formed company should issue to its shareholders a share certificate is prima facia evidence of the ownership of those shares. There is no prescribed convention for the design of the share certificate which is an internal corporate affair.

Incorporating your business is one of the best ways you can protect your personal assets. A corporation can own property, carry on business, incur liabilities, and sue or be sued. In effect, that means business owners can conduct business without risking their homes, cars, savings, or other personal property.

When you’re a sole trader or a partner, you can take out as much cash as you like from the business account and HMRC won’t come after you. They will only get upset if you then put that private jet through the business’s accounts and try and claim tax relief on it.

There are four ways which you can withdraw money from your company’s account into your own:

1. Salary.
2. Dividend payments.
3. Director’s loan.
4. Reimbursement of expenses.