When you go into business, you need to choose a structure for your business that suits the way you work and the kind of work you do.
Choosing a structure for your business
When you start a business, it’s important to choose a structure that suits the way you work and the kind of business you’re in.
There are 3 common structures for businesses in New Zealand — sole trader, partnership and company. If you’re unsure which structure to choose, seek professional advice from an accountant or lawyer before you make a decision.
If you decide to set up a company
When you set up a company, you’re creating a separate legal entity. A company can do many of the same things as an individual — hold property in its own name, enter into contracts, sue and be sued.
incorporated in New Zealand have the same basic elements:
- a company name
- at least one share, one shareholder and one director
- contact addresses.
There are several different types of companies. You need to choose one that suits your business.
Choosing a company name
Before you set up a company, you need to reserve its name on the Companies Register. There are firm guidelines to follow when choosing and reserving a company name. Once you've reserved a name and it's been approved by us, no other company can incorporate with an identical or almost identical name.
There are some names that aren't acceptable under the Companies Act 1993.
Directors are responsible for managing the company’s day-to-day business and may also be shareholders. They have duties to the company, its shareholders and others dealing with the company.
All directors must be registered with the Companies Office, and sign a consent form. They are responsible for tasks such as preparing and filing statutory documents, and reporting annually to the Companies Office.
All companies must have at least one director who lives in:
- New Zealand, or
- Australia, and who is a director of a company incorporated in Australia.
Keen to develop your director skills?
Being a good director can help your company to run effectively, to achieve its goals, and to maintain a good reputation.
Check out the governance resources available at business.govt.nz
Find out more about the role and responsibilities of a director at business.govt.nz
Shares and shareholders
Every company must have at least one shareholder and at least one share.
Shareholders are investors in the company, but they’re not responsible for the day-to-day management of a company’s business.
They have the right to vote at meetings of shareholders on some decisions about how the company is run, including:
- changes you make to a company's constitution
- approving major transactions, and
- authorising dividends.
The number of shares each shareholder owns determines the level of voting control they have.
Your company’s contact details
All New Zealand companies must have:
- a registered office address — a physical address in New Zealand where company records are kept
- an address for service — a physical address where legal documents can be delivered to the company
- an address for communication — a post office box, private bag or physical address that the we can use to contact your company.