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Where corporate status is not helpful in reducing the cost of extracting profits from an owner-managed company, unincorporated trading may be attractive:

1. Ìý

   •ÌýÌýÌýÌý the bank overdraft and other borrowings will still be secured by personal guarantee

2. Ìý

   •ÌýÌýÌýÌý major risks will still be covered by insurance

3. Ìý

   •ÌýÌýÌýÌý all available profits may be drawn to support living expenses and there may still be little in the way of revenue reserves

4. Ìý

   •ÌýÌýÌýÌý the assets will be carrying few, if any, unrealised gains (with the possible exception of goodwill)

5. Ìý

   •ÌýÌýÌýÌý the shares will all be held by the husband and wife/civil partners directors and be worth no more than the unincorporated business

In such circumstances an immediate and incontrovertible change in the employment status of the directors may be achieved by the simple expedient of disincorporation. The trade formerly carried on by the company will henceforth be carried on in partnership by the former directors and the exchange of employed status for self-employed status will be automatic.

Where this step is contemplated, consideration