“I Don`t Make Enough Money to Incorporate!”
Will Incorporating Really Benefit You?
Some people resist the idea of incorporating their business because the tax savings may not justify the added costs of incorporation, annual minutes, and extra tax returns.
However, incorporation gives advantages that go far beyond tax savings.
Insurance may give you some protection against loss. However, you may suffer business losses and lawsuits that may not be covered. For extra protection, consider incorporating your business. The limited liability of the company alone may justify the additional cost and complexity.
Corporations may also be used for income-splitting with your family, as well as estate planning and retirement planning objectives. Additionally, corporations lend some credibility to smaller businesses and may enhance your business image and prestige in the eyes of clients or suppliers.
Lower corporate tax rates (currently 18%) will generally apply on small business income. Even in loss years, wages can be paid by the corporation to you so that you may utilize personal tax credits available.
If unincorporated, these credits might be lost forever. Furthermore, larger corporate losses can be carried forward to future (hopefully more profitable) years.
Being incorporated may give you more flexibility and advantages than you originally anticipated. Certainly, it is not prudent to reject it as an option simply because it is more complicated and costly. In fact, it may be one of the best investments you ever made.
Source: FINNOVATION group
Summarize: DKT Business Services Pte Ltd