The five core reasons that software developers cite for using a company as the vehicle to sell their software are as follows:
♦ Presence—Companies are perceived to be professional.
♦ Security—Legal protection from creditors.
♦ Tax benefits—Companies give you more tax options. (In some jurisdictions there are also other financial advantages.)
♦ Shareholdings—Gives key players a slice of the action as well as a means of raising money.
♦ Public accountability—Suppliers and clients' companies are reluctant to trade with anything less. Taking the step to become a company shows you are prepared to accept the responsibilities and obligations of formal trading.
Companies are set up under the jurisdiction (laws) of the country in which they are incorporated. They have to behave in accordance with the law and tax codes of that country. This does not stop them being able to trade abroad.
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