Pros
Limited Liability: Shareholders are generally only liable for company debts up to the value of their investment, protecting personal assets.Perpetual Succession: The company is a separate legal entity, meaning it continues to exist regardless of changes in ownership, retirement, or death of members.Easier Access to Capital: Companies can raise funds more easily by issuing shares or obtaining bank loans compared to sole traders.Transferability of Shares: Ownership can be easily transferred, enhancing liquidity for investors.Credibility & Growth: Incorporating provides professional credibility and enables easier expansion
Cons
High Costs and Complexity: The formation process involves high costs (legal/accountant fees) and ongoing administrative burdens.Double Taxation: Corporate profits may be taxed, and dividends distributed to shareholders may be taxed again.Lack of Secrecy: Companies are usually required to file public financial statements, making their financial position public.Regulatory Compliance: Strict government regulations and legal requirements must be followed, creating higher compliance burdens.Managerial Misuse: Potential for conflict of interest between owners (shareholders) and managers (directors).