Before you set up a company
Choosing a structure for your business
When you start a business, it is important to choose a structure that suits the way you work and the kind of business you are in. There are 3 common structures for businesses in New Zealand:
- Sole trader
- Partnership, and
- Company.
Which structure is best for you will depend on how you wish to run your business, and your plans for the future.
If you are unsure which to choose, you should seek advice from an accountant or lawyer before you decide.
You may also wish to refer to the business.govt.nz website, which contains useful information about the different business structures, and a handy 'Choose Business Structure' tool.
Use the choose business structure tool External linkIn this guide
When you set up a company, you are 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.
All companies incorporated in New Zealand have the same basic elements.
- A company name.
- At least one share, one shareholder and one director.
- Contact addresses.
Choose the right company type
There are 3 different types of companies. You need to choose one that best suits your business.
Choose 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 have reserved a name and it has been approved by us, no other company can incorporate with an identical or almost identical name.
There are some names that are not acceptable under the Companies Act 1993.
Decide who the company directors will be
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.
Develop your director skills
By developing your skills as a director you can help your company:
- run more effectively
- achieve its goals, and
- maintain a good reputation.
business.govt.nz resources
Determine your shares and shareholders
Every company must have at least 1 shareholder and at least 1 share.
Shareholders are investors in the company, but they are 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.
Choose the contact details for your company
All New Zealand companies must have the following addresses:
- 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 we can use to contact your company.