Choosing the correct business structure when you start out in business is important.
An incorrect choice at the start may be costly to change later on. Many people believe they need to form a company to start in business. While a company is a valid business structure it's not always the best option for everyone.
A company is a legal entity, separate from the shareholders that own the company.
A company will need to apply for a company name and for its own IRD number.
The shareholders liability for losses is limited to the amount of their shareholding in the company.
A company has a greater number of compliance responsibilities than a sole trader or partnership. Companies not only have compliance responsibilities with Inland Revenue, but also the Companies Office.
A company can apply for an IRD number, register as an employer and register for GST when they incorporate through the Companies office website.
It's important before a company registers for GST or as an employer that they seek advice from us, an accountant or a tax advisor about whether or not they need to register. There may be financial implications if they need to de-register at a future date.