| Commentary

36.1 Introduction

| Commentary

36 Limited company

36.1 Introduction

The position of a shareholder in a limited liability company who wishes to dispose of his investment in that company is more straightforward than that of a sole trader or partner. This is because of the separate legal personality of the company and the associated separation of the ownership and management of the company1.

Basically, a shareholder’s disposal of his shares in the company has no effect on the continued trading of that company for tax purposes2. As a result, there are no income tax consequences of the disposal of the

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