Chris Thorpe points out how a company could benefit a business, and what directorship entails.
When deciding whether to incorporate a business, tax is clearly a major factor; but it is not the only one, as a company is a separate legal entity – a body corporate, and one which needs to be properly managed by its officers.
Rules and regulations
A limited company’s constitution is contained within its ‘articles of association’, which specify the operational rules and regulations and essentially acts as a contract between the company’s owners and its directors.
The first thing which many sole traders or partners need to realise is that the company’s profits are the company’s and not theirs; they cannot take drawings at will.