Should I trade through a shelf company?

If you are a small supplier of goods, you may be wondering whether would be better to trade through a company. The answer is usually "Yes".

The first question I ask is "Are you providing a service or supplying goods?"

If you are supplying goods, then the answer is usually yes, rather trade through a company. Why?

1) Your customers will probably respect a company more than a sole trader.

2) Companies are taxed at 28%, individuals at from zero to 45%. You can balance your salary in such a way that the total tax is minimised.

3) The company may well qualify as a Small Business Corporation (SBC) which has very significant tax advantages.

4) The company can be owned by a trust, which has significant advantages as it grows in value, although it won't qualify as a SBC in this case.

5) The allowable tax deductions are clearer for companies as your personal affairs will not be included in the company tax return, whereas a sole trader submits one tax return only which includes their personal affairs and those of the business.

 


Click here
 to buy a company from us, click here to buy a Trust from us or click here to get absolutely FREE, ONGOING business and Trust coaching, and tax advice from our CEO, Derek Springett Pr(Eng); CA(SA); Registered Auditor.

Memberships

South African Institute of Chartered Accountants. Designation CA(SA)  Internationally Accredited Financial MediatorsIndependent Regulatory Board for Auditors. Designation RA<Engineering Council of South Africa. Designation Pr(Eng) Member of MENSA, the High IQ Society

 

 

 

Find Us Here

Address: 1st floor, Gallagher School Building, 537 Lupton Drive, Midrand, Gauteng