New Zealand Introduction
Apart
from the business forms described below, other
types of organisation in New Zealand include the
sole trader, the trading trust, the loss attributing
qualifying company, the unlimited company, the
cooperative organisation, the incorporated not-for-profit
society, superannuation schemes, and public authorities.
There is no central register of business names
in New Zealand, as a business name has no legal
status. To secure a trading name, a trademark
or brand would need to be registered, or a company
formed.
If
a sole trader, partnership or another unincorporated
form is to be chosen as the form of business,
the Intellectual Property Office website and the
register on the Companies Office website must
be checked to see if a similar registered trademark/brand
or company with the name to be used is already
in use. It is not possible to register a company
name that conflicts with one already registered.
An IRD number must be obtained for a new business
from the Inland Revenue (IR). If an IRD number
is not obtained, tax will be deducted at a no-declaration
rate, which is higher than the normal deduction
rate. The IR prefers all business owners to have
tax agents (generally an accountant) to process
the business’s tax affairs.
Registering for goods and services tax (GST) is
not compulsory until sales reach above a certain
threshold. However, as soon as one or more people
are employed by a business, it must register as
an employer with the IR and begin making PAYE
deductions from employees' earnings.
BACK
TO TOP
New Zealand Limited Liability Company
A
limited company in New Zealand is normally indicated
as “Limited” or “Ltd”.
Formation of a company is relatively quick and
easy. After the search, free of charge, on the
register held at the Companies Office, a company
name can be reserved (for 20 days) after payment
of NZD10. The company’s details (of at
least one director, one shareholder and a physical
registered address) can then be submitted online
against payment of NZD150. Application for IRD
and GST numbers can be made at the same time.
Registration is effective after submission of
consent forms from each director and shareholder,
who can be the same person if he or she is the
sole shareholder/director. In addition to a
certificate of incorporation, the company will
receive a seven-character unique company key
for use in future communication with the IR.
There is no minimum share capital, and there
is no necessity to specify authorised and paid-up
share capital. Each company must maintain a
share register, and hold an annual general meeting
(AGM).
There
is no requirement for a board of directors,
or a supervisory council.
A
company may, but does need to have, a constitution.
If a company does not have a constitution, the
company, the board, each director and each shareholder
have the rights, powers, duties and obligations
set out in the Companies Act 1993.
A Limited Liability Company must file, at no
charge, an annual return of its updated details
with the Companies Office each year to maintain
its registration.
The director(s) of a company must ensure that
the company keeps proper accounting records,
and every company must prepare financial statements
annually. These must be audited unless all shareholders
agree otherwise in each year’s AGM.
A company’s financial statements have
to be audited if it is has issued shares to
the general public in New Zealand.
BACK
TO TOP
New Zealand General and Limited Partnerships
General
Partnerships do not have a legal “personality”
in their own right. A general partnership is,
however, required to file tax returns, with
each partner taking his or her share of partnership
profits within his or her taxable income.
Under a General Partnership, two or more parties,
with unlimited liability, enter into a contract
(normally under a partnership agreement) to
carry on business together in order to make
a profit. In New Zealand, the Partnership Act
1908 sets out much of the law about general
partnerships, although it may be overridden
on particular matters by a partnership agreement.
Limited Partnerships are formed of general partners,
with unlimited liability, together with limited
partners, who are liable to the extent of their
capital contribution to the partnership.
A General Partnership does not have to be registered
but, since the Limited Partnerships Act 2008,
Limited Partnerships and Overseas Limited Partnerships
are separate legal entities and must be registered
with the Companies Office, which maintains a
Limited Partnerships Register.
Registration, maintenance and annual return
filing for Limited Partnerships and Overseas
Limited Partnerships is conducted through manual
forms, for a cost of NZD270.
A Limited Partnership is formed by registration
in New Zealand. An Overseas Limited Partnership
is a partnership that has been formed in a country
other than New Zealand but, because it is engaged
in business activities in New Zealand, must
register as an Overseas Limited Partnership.
The primary objective of the introduction of
the Limited Partnerships regime was to facilitate
growth in New Zealand's venture capital and
private equity industries.
A limited partner is prevented from being involved
in the day-to-day management of the Limited
Partnership. However, to enable limited partners
to become involved in key decision-making activities,
the legislation includes a “safe harbour”
mechanism, such that limited partners can be
involved in, for example, the decision about
whether to approve or veto an investment proposal.
New Zealand Branches
All
overseas companies intending to carry on business
in New Zealand must register within 10 working
days of commencing to carry on business.
An overseas company can operate in New Zealand
as a subsidiary registered on the Companies
Office’s Register, but the Companies Act
also allows overseas companies to establish
and register as a Branch (not a separate legal
entity) in New Zealand on the overseas register.
The
application to be registered must state the
name of the overseas company; full details of
the directors of the overseas company at the
date of the application; the full address(es)
of the place(s) of business in New Zealand of
the overseas company; and the name and address
of at least one person resident or incorporated
in New Zealand authorised to accept service
of documents in New Zealand, together with evidence
of incorporation of the overseas company.
The registration system is designed to enable
New Zealand creditors to sue an overseas company’s
branch in New Zealand, rather than forcing them
to sue in the company’s home jurisdiction.
Every overseas company that carries on business
in New Zealand must ensure that the Companies
Office receives each year an annual return,
confirming that the information on the overseas
register is correct.
All
overseas companies were required to file financial
statements. However, since 2007, if a company
has 25% or more foreign ownership, it only has
to file financial statements if it has two of
the following: total assets greater than NZD10m,
turnover greater than NZD20m, or 50 or more
full-time employees.
|
Lowtax Network Portal
Front Page
Tax Jurisdictions
Featured Content
