Extraction of Funds – Dividend vs Salary

If you are establishing a new business or you are already a director and owner of a new company, it is vital to consider tax implications and the most effective methods of extracting funds from your business. You must also consider which trading formats are available for you and the consequence of choosing each one.

For an entrepreneur there are three available trading formats to choose from: sole trader, partnership and companies (with the most popular for small businesses - limited company).

As a sole trader you are the only person working in your business (you are not able to hire anyone). The biggest issue with being a sole trader is having liability for the debts of the business to the full extent of personal assets (same with a partnership, unless its limited liability partnership).

Extraction of Funds - Dividend vs Salary
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