Business Set Up

We will be able to advise and assist you set up your business with the right business structure for your business. 

Sole Proprietorship

There is no requirement for the registration of a sole-proprietorship. Generally suitable for small low risk type of businesses where the business is part of your personal finances.  You will be personally liable for all the income and losses in the business and will include these in your personal tax returns.  If the turnover from the business is expected to exceed $60,000 then you must register for GST.

Partnership

Similar to a sole-proprietorship, and can be used when more than one person engages in a business enterprise.  The nature of the partnership relationship, property ownership, and other aspects of a partnership is governed by the Partnership Law Act 2019.  The partnership is required to distribute all its profits or losses to the partners and the partners required to include these in their personal tax returns.

Limited Liability Company

A company can be registered in the Companies Act 1993 and the business enterprise can trade in the name of a company.  The company will be a separate legal entity with one or more of the owners.  Profits and losses are not held against the owners.  Profits can be distributed to the shareholders and dividends or shareholder salaries.  Losses can be carried forward and set off against future profits. If the company makes capital profits, the profits can be distributed tax-free when the company is placed into liquidation.

Look Through Company

Look Through Companies are registered as normal companies under the Companies Act 1993 but are treated as partnership under the Income Tax Act 2007.  Profits and losses earned each year must be distributed to the shareholders in proportion to their shareholding in the company.  Capital profits can be distributed tax free.

Limited Partnership

Limited partnerships are a form of partnership involving general partners, who are liable for all the debts and liabilities of the partnership, and limited partners, who are liable to the extent of their capital contribution to the partnership. A limited partnership is formed on registration at the Companies Office and continues until it is deregistered. A limited partnership must have a written partnership agreement containing certain matters specified by law. The agreement can be amended at any time in accordance with procedures specified within it. The partnership agreement is not required to be registered and therefore is able to be kept private as between the partners.  Profits and losses in a Limited Partnership is distributed in accordance with the partnership agreement.

Trust

A Trust is set up through a “Trust Deed”.  Normally a trust will have:

1. Settlors – the persons who settles funds or assets into the trust,
2. Trustees who are tasked with managing the assets of the Trust
3. Beneficiaries – who are entitled to benefit from the profits and assets of the trust.

The trust deed is designed to bind the relationships of the person setting up trust and injecting funds into the trust, the Settlor, with Trustees

Trust income can either be left in the Trust for the Trustees to pay taxes on the income or can be distributed to beneficiaries whereby the distribution becomes beneficiary income.

Trusts are generally used as an asset protection vehicle and can help preserve wealth for future generations.