When setting up a business it is important to establish a working relationship with a commercial law specialist and your accountant. They will be able to advise you on all the in’s and out’s of being in business and what type of structure for your business. They have expert information on government acts and laws that affect your business, how to treat any intellectual property you may have, and how you can protect your personal assets.

Each of these people will become a key member of your wider business team so it is important to bring them on in the beginning for feedback and advice.

What type of structure will you operate as?
There are 3 main types of business structures under which you can operate. Each of these structures has its strengths and weaknesses depending on how you see your business progressing and expanding, as well as the amount of liability you have as the owner.

Sole trader – Free set-up. You control, manage and own the business yourself, but you are also responsible for all debts that the business may incur. Examples include carpenters, cleaners or the local fish n chip shop.

Partnership – Free set-up. Partners share costs and combine skills. You decide what partnership ratios are (50:50, 70:30, etc.) and a partnership agreement is strongly recommended. Examples include lawyers and accountants.

Limited Liability Company – Formed by registration at the NZ companies office at a cost.  A company is a separate legal entity and will need a separate IRD number. The company is liable for all the business debts.  Examples include the Warehouse or TradeMe.

Each structure has different tax implications that you must be aware of before deciding which structure is right for you. We recommend exploring your options in more detail with your lawyer or accountant before deciding.

Do you need a patent, copyright, trademark?
If you have intellectual property you will need to understand these laws to protect your brand, product or idea from others stealing them.  It’s important to secure your intellectual property by registering your domain, trade mark or patent at the correct office. You can register your domain name at WebFarm.

What government acts & laws apply to your business?
There are many Acts and Laws that protect consumers, employees and the general public. Some examples that you may be interested in are the Consumer Rights Act and the Partnership Act 1908. Your lawyer will be able to advise you on any others that affect your business and what your obligations are.

Helpful links
www.companies.govt.nz
www.ird.govt.nz
www.nz-lawsoc.org.nz
www.webfarm.co.nz
www.biz.org.nz
www.nzstartups.biz
www.entrepreneur.com