A company is an entity in it’s own right. The shareholders own the company, but the company owns the business. A company will be taxed on it’s own profit, the profit is then available to be distributed to the shareholders as a dividend provided the tax has been paid to the ATO. The shareholders do not have to be the directors of the company, but in small business they usually are. A company can have as few as one (1) shareholder and one (1) director. The directors of the company would be employed by the company, thus making the director an employee. As an employer, the company is required to make compulsory superannuation contributions on behalf of all employees, this includes the director/s. In Queensland, the directors of a company are not required to be covered by work cover insurance.
A company receives income and pays expenses. A company may make payments for items that are not tax deductible, this will be reflected as “tax effective” items prior to being assessed for tax.