Dividends
If the director also a shareholder of the company.
A company can pay a distribution of its profits to its shareholders, which is known as a dividend. The dividend may include a franking credit – which is the amount of tax already paid by the company and passed on to the shareholder.
– The company must issue a distribution statement to everyone who receives a distribution. It must show the amount of the franking credit attached to the distribution and the extent to which it’s franked. The company may need to lodge a franking account tax return.
– You (the shareholder) must report dividends and any franking credits that you receive in your income tax return. You may have to pay income tax on the dividends you are paid.
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