HI,
I have come across many clients who are telling me other accountants are telling them that they can be a sub-contractor to a company in which they are sole director and shareholder of as long as you sub-contract to your sole trader ABN is that true?
I was under the impression that this was not possible and that the only 3 ways to take the money out of a company were as a director loan, wages or dividends.
I'd like to also add in that if it is possible, how would they not be deemed an employee of the company.
Hi @EMMANUEL123,
If you're the sole director and shareholder of a company, and you try to subcontract to it using your sole trader ABN, we may still see you as an employee of the company. This is because you're working for your own business, and the company controls the work you do. Even if you have an ABN, that doesn’t automatically make you an independent contractor.
Being a contractor means you run your own business and have control over how and when you work. But if the company tells you what to do, when to do it, and pays you regularly, you’re probably an employee.
You're correct in that there are only three proper ways to take money out of a company:
You can’t just transfer money from the company to yourself without using one of these methods. The company is a separate legal entity, even if you own it.
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