| Commentary

24 Introduction

| Commentary

(d) Personal taxation of income received by the proprietors from the business

24 Introduction

A fundamental distinction between the taxation of sole traders or partnerships on the one hand and of limited companies on the other is that, in the former case, proprietors are subject to income tax on the entirety of their business income, whether these profits are paid to them by way of remuneration or retained by the business as additional working capital. Companies, by contrast, pay corporation tax on business income, but individual shareholders are subject to personal taxation only upon remuneration and dividends paid. This factor

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