A company is a separate legal entity. It has the ability to sue, be sued. Moreover,  it has features such as its own Tax File Number and its own Australian Business Number. Therefore, if a company suffers a loss, only the company can be sued, you and your assets are secure. Director/s are in charge of the day to day running of the company. Shareholders or Members are people who have a stake in the business, the don't participate in managing the businesses day to day. Its pros include : its easy to raise capital, its investors are not liable for company loses. It also has cons and they are shareholders or members have limited control over how the company is run.