I was talking to a client explaining the benefits of incorporation (he is currently a sole trader - no employees).
- Limited Liability
- More tax efficient
He agreed with the tax efficiency side of things, but told me he had Public Liability Insurance and Professional Indemnity Insurance so the limited liability argument for a company, for him, is weakened.
I must admit I was a bit stumped on this point, what would the rest of you said? Am I missing something?
Replies (2)
Please login or register to join the discussion.
Uninsured risks
A major debtor goes under so that he can't pay his bills. His suppliers increase their prices to a point the business becomes unsustainable. He personally suffers an illness that means he cannot operate the business, but has overheads that cannot be immediately cancelled.
Not covered by his insurance but, assuming he is not at fault, risks the limited liability of a company will protect him from.