First Principles of Business Law
Business organisations in Australia

7. Companies

Question 17. What happens to profits a company makes? Who is liable to pay tax on company profits?

 

 

 

Read the statements below and select the best one.

(a) The profits made by a company belong to the company and are taxed in the hands of the company. The directors decide what should be done with the company's profits.

(b) The profits made by a company belong to the shareholders (who are the owners of the company). The profits are taxed as part of each shareholders' income, at their individual marginal rate.

 

 

 

 

 

 

 

  

 

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