Roles within a private company 043-04010050

A customer may become a shareholder in a number of ways, including:

• purchasing shares
• having shares transferred to them by way of a gift from an associate
• taking up options
• receiving shares as an inheritance from a deceased estate

The value of a shareholder's investment depends on decisions made by the directors. Shareholders are guaranteed no return on their investment in a private company either in terms of income or capital.

A customer over the age of 18 may become a director when a company is first set up, or may be appointed by another director or by a vote of shareholders. Written consent is required for each person who agrees to become a director of the company. Directors make decisions regarding the management of the company.

A customer may be considered a contributor if they contribute capital to a company:

• and are owed money in return, by way of loan (otherwise referred to as a creditor)
• in return for equity (referred to as a shareholder or member)
• as a gift

Note: a customer may also be considered a contributor if they contribute services to a company.

An employee may receive remuneration for their personal efforts in money or money's worth, for example, wages, fees, commissions, fringe benefits, superannuation contributions. A person who is only an employee, has no other involvement in the company and is not an associate will have their remuneration assessed as an employee.

An associate is a person(s) or entity(s) who could be expected to act in accordance with the customer's or couple's wishes. A customer may exert informal control over a private company even though they are not a director of a private company.

For example, an accountant, solicitor or other professional may be acting under instructions from the customer; or a family member may be following the directions of the customer or be influenced by the customer's wishes.

A company secretary is appointed by the directors to attend to the company's administrative matters. The public officer for a company is responsible for the company's tax related issues. Generally, the company secretary is also the public officer.

A customer may be involved in a private company in more than one way. For example, a customer may be both a shareholder and a creditor. This information can be found on the Module PC - Private Company form (MOD PC).