You should involve the expert services of an accountant as soon as you have decided that you are going to set up a business in New Zealand.
You will need to take a number of key decisions right at the beginning and your accountant can help you get these decisions right. Not that many of these decisions cannot be rectified later, but, if you get them right in the first place, you can get on with establishing your business.
You should note that the Inland Revenue recommends that every business owner has a business agent (normally an accountant) to oversee tax affairs.
Unless you have a substantial amount of business experience, you are going to need a lot of help in establishing a successful business. You will find that a good accountant is a one-stop shop for a whole host of business services that you may require. Their services range from accounting & taxation to business advisory services such as business planning and business organisation.
Obviously, your accountant is going to charge for their services, just like any other professional. But don’t be afraid of asking about their fees in advance so that you know exactly what their advice is going to cost.
Set up an appropriate business entity with the help of your chartered accountant. The three most common business structures in New Zealand are sole traders, partnerships and limited companies. Here are just a few salient features for each one:
Sole trader
The owner or proprietor owns the business outright and is completely in control. The owner is entitled to all the profits (or suffers all losses) of the business and is personally liable for the business’ debts. There are much less registration formalities and business can generally commence immediately.
Partnership
Two or more people “join hands” to run the business and they share the investment and management duties. They share profits in a predetermined percentage and each partner is personally liable for all the debts of the partnership. It is always advisable to draw up a partnership agreement in writing so that there are no ambiguities or disputes later. Here again, only minimal registration is required.
Limited Liability Company
The company is a separate legal person and trades in its own right. The legal process known as incorporation and the reservation of the company’s name needs to follow procedures laid down in the Companies Act. The liability of the shareholders and directors is generally limited to their investment in the shares of the company, unless they’ve provided personal guarantees to lenders or can be proven to have traded recklessly.
So, with the help of your chartered accountant, you’ll be able to choose the structure that suits your business objectives. If you are about to start a business in New Zealand, all the best. Get the best start possible by hiring a top-flight accountant.