Seasoned business owners trading in companies for many years know and understand the implications of the Companies Act and accept that they often require professional guidance and services that they are either not competent to perform themselves or that which does not warrant taking their valuable time away from what they do well, working on their business.
These business owners understand the importance of compliance of the Companies Act for the benefit of their business as a whole and are comfortable trading in these structures and have been successful in doing so for a long time.
As accountants, we have seen a common mistake that start-up businesses make by forming a company when their situation does not warrant this structure initially and their business does not make sufficient gross profit to afford to factor in essential professional fees, thereby falling foul of the Companies Act and exposing themselves to the dire consequences of potential criminal offences.
The truth is that the cost of operating in a company structure is far higher than operating as a sole proprietor or in a partnership.
In our May 2017 issue of the BAN Bulletin, Monique Sharland, CEO of Business Accounting Network, shares some of the reasons why costs of a company structure are high in comparison to a sole proprietor that newbie business owners don’t know, nor even some seasoned company owners!
Click here to read our latest article – Why forming a company for your start-up could be your worst mistake