It was established in late 1964 by promoter Ivan Dayman in collaboration with musician-producer-arranger-songwriter Pat Aulton and entrepreneur, producer and songwriter Nat Kipner (who subsequently founded the Spin Records label).
Label founder Ivan Dayman reportedly ran a gravel quarry in his hometown of Adelaide, South Australia before moving into pop management and promotion in the early 1960s.
Kipner had teamed up with Dayman when the latter expanded his pop promotions into Brisbane, where Nat was producing TV pop shows for Channel 7, among many other ventures; he also ran a record store, wrote comedy skits and songs for the George Wallace Jr TV variety show Theatre Royal, ran a small publishing company with Johnny Devlin, and wrote songs with Devlin, country musician Geoff Mack (author of "I've Been Everywhere") and Nat's teenage son Steve Kipner.
During Sunshine's peak period from 1964 to 1967, singles and EPs were by far the biggest selling vinyl formats in Australia while LPs—still something of a luxury at that time—formed only a small percentage of total record sales.
Dayman also used Worsley and the Blue Jays to open several other Queensland venues in Bundaberg, Toowoomba, Ipswich, Inala, Surfers Paradise and the city and by the end of the year, with the success of their first single, they were one of the hottest pop acts in the country.
In November 1964 Sunshine issued the first single jointly credited to Tony Worsley and The Fabulous Blue Jays, "Sure Know A Lot About Love", which charted in Brisbane, and the band broke through in other capitals with a their powerful version of Rosco Gordon's "Just A Little Bit" in early 1965.
The Sunshine roster featured several male solo singers including Normie Rowe, Peter Doyle (who later joined The Virgil Brothers and The New Seekers) and Mike Furber.
Pop historian Bill Casey has suggested that the financial strain of Normie Rowe's extended overseas stay was a contributing factor, but it seems likely that the main cause of the company's demise was Dayman's questionable business practices.