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 body to carry on business. A company can do many of the same things as an actual person — hold property in its own name, enter contracts, sue and be sued.
incorporated in New Zealand have the same basic elements:
- a company name
- at least 1 share, 1 shareholder and 1 director
- contact addresses.
There are several different types of companies. You need to choose one that suits your business.
Your company’s name
Before you set up a company, you need to reserve its name on the Companies Register. There are strict guidelines on how to choose and reserve a company name. Once you've reserved a company name and it's 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. Directors have duties to the company, its shareholders and others dealing with the company.
Directors are also responsible for the business affairs of the company, such as reporting annually to the Companies Office. Company directors form a board.
All companies must have at least 1 director who lives in:
- New Zealand, or
- Australia, and who is a director of a company incorporated in Australia.
Shares and shareholders
Every company must have at least 1 shareholder and at least 1 share.
Shareholders are investors in the company, but they’re not responsible for the day-to-day management of a company’s business or its affairs.
They have the right to vote at meetings of shareholders on some decisions about how you run the company, 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.