Doing Business as an Incorporated Company
Posted by P.K. Chan
Profitability is the key word if you are considering whether you are to conduct business in your own name or in the name of a limited company.
Ms. K.F. Sun of Sunny Sun & Associates talked about the advantages of using a limited company to conduct business over employment under one's own name.
In short, it is inexpensive to incorporate a company. Advantages could be far-reaching. The tax rate for profits up to $400,000 is only 17.6% compared to an average of over 30% for personal tax rates. Losses could be carried forward and off-set against future profits. Profits are spread out to shareholders instead of converging onto a single individual, and thus would be subject to lower marginal tax rates. Liabilities are limited. The name of a company is automatically branded without a patent application.