For those interested in starting their own business or incorporating a company in New Zealand, the first thing they will need to do is register the company with the Companies Office. We provide a brief overview of the processes involved and what information a business will need to prepare when registering.
What to prepare when incorporating a company?
With any new company incorporation, the first thing the business owner needs to do is create an online account with the Companies Office and register a name for the company. The cost of incorporating a company is $114.39 (plus GST) and the cost of reserving a company name is $10 (plus GST).
Company details must be provided, including the following:
1. The company name
The name must be unique, i.e. it cannot be the same or similar to an existing company name. The name can be changed after the company is incorporated.
2. The contact addresses
The contact addresses include a registered office address, a service address, and a communication address. The registered office address and the service address should both be physical addresses in New Zealand. If any of the address locations you provide change after registering the company, make sure your details are updated with the Companies Office.
3. A company constitution
This is not a mandatory requirement as not every company needs to make a constitution, but a constitution can be beneficial for a company to have. A constitution can be used to clearly list out the rights, powers, and duties of a company, as well as any executives or shareholders involved.
4. The information of registered shares, shareholders, and directors
The company must have at least one share, one shareholder, and one director.
What should you be aware of?
Once you have filed a company name, you have to complete your application for incorporating your New Zealand company within 20 working days, including filing consent forms that have been signed by all directors and shareholders.
In addition to this, a business owner wanting to start a company in New Zealand should also be aware of the related financial accounting aspects, especially concerning the following.
1. Business structure
Registering as different entities will have different advantages for a business. While sole traders must take unlimited responsibilities for business debt, a company structure can be seen as a separate legal body and can therefore take responsibility independently.
Choosing an entity type for your business is also very important to get right because different types of entities require different tax rates. If an incorporated business has a structure that is not suitable for their business, they may end up paying more tax than necessary.
2. GST registration
While some businesses should register GST, others need not to. This depends on your annual turnover and whether or not your business activities are taxable.
If you register GST, your selling price is much higher. However, after you register GST, you can claim a GST refund. To the owner of a business, this is a great deal of cash inflow.
3. Employer registration
If you want to hire employees or hire yourself as an employee, you must register yourself as an employer so that you can pay PAYE.
4. FBT registration
FBT means fringe benefits tax. If your company is providing a fringe benefit, you need to apply for FBT. For example, when you use your business goods and services for private purposes or when you (as an employer) contribute to an employee’s benefit fund, insurance policy, or superannuation scheme, you should register FBT in advance.
Rely on the experts at Premium Accounting Solution
As an experienced accounting firm, Premium Accounting Solution has been providing professional accounting services in New Zealand for over 10 years. For new business owners and experienced ones alike, knowing how to incorporate a company smoothly and efficiently in New Zealand can be difficult, especially when trying to remain compliant with NZ tax law.
Whether you’re looking for assistance throughout the whole complex process of incorporating a company in New Zealand, or simply after a little advice concerning which type of legal entity is the best choice for your business, you can rely on us! We provide excellent company incorporation services for clients throughout New Zealand and provide the most suitable solutions catered to each business need.
Call us and book an appointment with one of our accounting consultants today and let us make a good plan for you from the very beginning!
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