There are more than 500,000 businesses in New Zealand, most of which are made up of three different types of structures - sole trader, partnership and company. Here you'll find some of the key benefits and considerations of each business structure, to help you pin-point which one is right for your business.
This is the simplest business structure, where an individual is legally responsible for all aspects of the business. If you choose to start as a sole trader you'll typically make and be accountable for all the decisions, although you can hire people to help you make the best choices.
A partnership means that a number of people are responsible for the running of the business. Decision making and financial investment are often shared, potentially lessening some of the workload and risk, but compromises may have to be made to keep all partners happy.
Unlike a sole trader or partnership structured businesses, a business with a company structure is a separate legal entity. This means it has its own legal rights and personal liability is limited.
Knowing your business structure is important when setting up your business, to ensure you understand your obligations when it comes to registering for a New Zealand IRD number, business name, tax and Kiwisaver requirements.
Sole trader, partnership and company are the most common types of business structures in New Zealand, but there are other options, including Trusts. For more information on choosing the right business structure, you could talk to an advisor (lawyer or accountant) or visit business.govt.co.nz and check out the Choosing a Business Structure tool.
Every business is different and has unique banking needs, discover your options.
This page is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and should not be relied on. This information has been prepared without considering your objectives, financial situation or needs. We recommend you seek independent professional advice and contact Inland Revenue before acting on this information.