When you are about to commence your new business, deciding between incorporating and not incorporating your business will have corresponding consequences with regards to taxation and protecting personal liabilities. Owning a company is indeed one great responsibility, however dealing with your company incorporation is another one that shouldn’t be forgotten. Regardless of your decision to incorporate your company, a business entrepreneur must know about incorporation and these popular myths about it:
Myth 1: You can Avoid Taxes with Incorporation
Fact: According to regulations, Singaporean tax system has corporate taxes in place. Some entrepreneurs are under the impression that they can avoid state taxes by incorporating their companies. Each state levies corporate taxes that are to be paid and incorporations doesn’t make businesses exempt from it.
Myth 2: Incorporating After Product Launch is Totally Fine
Fact: Several entrepreneurs believe that it is okay to wait until product launch for incorporation. This is mostly done to avoid paperwork. However in reality, incorporating a business during the early stages can help protect personal liabilities. Early incorporation also allows obtaining long-term capital, if the owner plans to sell it fast.
Myth 3: Incorporation can be done any time
Fact: It is quite common for most entrepreneurs to believe that they can incorporate their business anytime they want, until they are ready to go to the market. However, it is possible for liability issues to come up before the product is launched, hence incorporating a business early can offer essential personal liability protection, as mentioned earlier.
Myth 4: Corporations can enjoy more deductions
Fact: Any business that is incorporated – be it a LLC, sole proprietorship or a corporation – is eligible for deductions that are ordinary and necessary. Incorporation of companies can help save more on payroll and self-employment taxes, but that doesn’t mean that they get to enjoy several other deductions, just because they are corporations.
Myth 5: I can handle all the incorporation procedures myself
Fact: Business owners assume that they can save time and money by undertaking and handling the incorporation process themselves. Without enough experience and knowledge about the associated legal regulations, they can commit several mistakes in the process and create complications down the road. They will also miss out on the quality advice about the incorporation opportunities they can exploit for maximum benefit.
Ensure you don’t fall prey to any of these myths and to make your business is run smoothly, deal with company incorporation firm in Singapore. Their experts will be more than happy to assist.
The author is an experienced professional having over 4 years’ experience in Singapore company incorporation. For more details, visit http://e-sandhurst.com