A businessman is contemplating investing in a business worth
Sh.5,000,000 but has not made up his mind on which form of ownership he
will assume. The business is expected to produce a profit of Sh.2,000,000
before tax and his drawings/salary averaging 10% on investment.
Required:
Advice the businessman on the tax implications of operating the business as a
company and a sole proprietorship using the above information.
(12 marks)