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The quick answer
Working alone and testing an idea
A sole trader setup has the least admin, but you carry the business debts and risks yourself.
Building a business with staff or investors
A company gives the business its own legal identity and makes ownership easier to record and change.
Running a member or public-benefit group
An incorporated society, charitable trust board or company may fit. Charity registration is a separate step.
Not sure? Use the official business structure tool, then ask an accountant and lawyer to check the tax, ownership and legal parts before you sign contracts.
At a glance
Compare the main choices
| Structure | Owners | Debt risk | Income tax | How it starts |
|---|---|---|---|---|
| Sole trader | One owner | Owner is personally liable | Owner pays individual tax | No Companies Office incorporation |
| Partnership | Two or more partners | Partners can be personally liable | Profit passes to partners | Agreement plus IRD and optional NZBN |
| Company | One or more shareholders | Usually limited to the company | Company pays company tax | Companies Office incorporation |
| Look-through company | Eligible company owners | Company remains a separate body | Profit or loss passes to owners | Company first, then IRD election |
| Limited partnership | General and limited partners | Depends on partner type | Usually passes to partners | Limited Partnerships Register |
| Trust | Trustees for beneficiaries | Trustees hold legal duties | Trust and beneficiary rules | Trust deed; NZBN where eligible |
The main structures
What each choice means
Sole trader
Best for: A person starting alone, contracting, or testing a small service business.
You do not incorporate at the Companies Office. Tell Inland Revenue that you are self-employed, keep full records, apply for an NZBN if useful, register for GST when required, and tell ACC the right business activity.
Benefits
- Fast and low-cost to start
- You control the work and keep the profit
- Uses your personal IRD number
Points to weigh
- You are personally responsible for debts and claims
- Business profit is your personal income
- It can be harder to bring in another owner or sell part of the business
General partnership
Best for: Two or more people who will share work, profit and risk.
Put contributions, profit shares, duties, decisions, exits, deaths and disputes in a signed partnership agreement. The partnership needs its own IRD number and IR7 return; each partner reports their share.
Benefits
- Simple shared ownership
- Partners can combine money and skills
- Profit and loss pass to the partners
Points to weigh
- A partner can bind the partnership
- A partner may have to meet the full debt
- Disputes can stop the business
Limited liability company
Best for: A firm that will hire, borrow, add owners, hold assets or trade with more risk.
A New Zealand company is registered under the Companies Act 1993. It needs at least one shareholder, at least one qualifying resident director, a registered office, an address for service and yearly Companies Office updates. A constitution is optional; a shareholder agreement often still helps.
Benefits
- A separate legal body
- Share ownership is clear
- Shareholders are not usually liable for company debts
- The business can continue when an owner leaves
Points to weigh
- Director duties carry real legal risk
- Annual returns, records and company tax work
- Banks and landlords may still ask for personal guarantees
Look-through company (LTC)
Best for: A small eligible company whose owners need company law with partnership-like income tax.
An LTC is not a separate kind of incorporation. Register a company first, then make a valid election with Inland Revenue. Get tax advice before choosing or leaving LTC status.
Benefits
- The company remains a separate legal body
- Tax profit or loss passes to owners
- Can suit some closely held firms and property owners
Points to weigh
- Strict owner and share rules
- Owners can owe tax before cash is paid to them
- Entry, exit and asset-sale tax can be hard
Limited partnership
Best for: Investment ventures with active general partners and passive limited partners.
Register on the Limited Partnerships Register and use a written partnership agreement. This is not the same as a general partnership or an LTC.
Benefits
- Separate legal personality
- Limited partners usually risk only their agreed capital
- Income and loss generally pass to partners
Points to weigh
- A general partner carries wider liability
- More setup and filing work
- Limited partners must avoid taking part in management in ways that affect their protection
Trust
Best for: Holding and managing assets for named people or a stated purpose.
A trust comes from a trust deed and trustee actions; it is not incorporated like a company. Trustees can apply for an IRD number and, where eligible, an NZBN. Businesses often use a company to trade and a trust to hold shares.
Benefits
- Can set long-term rules for assets
- May help succession and shared family ownership
- Can own shares in an operating company
Points to weigh
- Trustees have strict duties
- More tax reporting and record work
- A trust is not a simple shield from claims or tax
Groups and special cases
Other organisations you can register
Co-operative company
A member-owned company that acts for members and must meet co-operative company rules.
Incorporated society
A separate body for a group with a shared non-profit aim. It needs at least 10 members, a constitution, a committee and yearly filings under the 2022 Act.
Charitable trust board
An incorporated board that holds and manages property for charitable aims. Incorporation and charity status are separate.
Registered charity
A tax and public-register status for an eligible charitable organisation. First choose the legal form, then apply to Charities Services.
Māori trust or incorporation
Collective forms for Māori land and assets have their own laws and governance. Use Māori Land Court and specialist advice.
Special financial or mutual bodies
Building societies, credit unions, friendly societies and industrial and provident societies serve narrow purposes and have their own registers.
See the official other business structures guide before using one of these forms.
Company checklist
How to register a New Zealand company
- 01
Check the structure and owners
Agree who will own shares, who will act as directors, how decisions work, and what each person will put in. Check director eligibility and get advice on a shareholder agreement.
- 02
Check and protect the name
Use ONECheck for company names, domains and trade marks. A company name does not give the same rights as a registered trade mark.
- 03
Create access and reserve the name
Set up RealMe and a Companies Office account. Reserve the name. The listed fee was $10 plus GST when this guide was reviewed, and the reservation lasts 20 working days.
- 04
Gather the details
Prepare director and shareholder names and addresses, share numbers, registered office, address for service, communication address, ultimate holding company details where needed, and an optional constitution.
- 05
Apply and send consents
Complete the online incorporation form and pay the listed $118.74 plus GST fee. Every director and shareholder must return signed consent forms within 20 working days.
- 06
Set up tax at the same time
The company gets an NZBN. Apply for its IRD number through the company setup flow. Add GST and employer accounts if they apply.
- 07
Keep the company current
Keep director, shareholder and address records up to date. File the Companies Office annual return and pay the listed $49.74 plus GST fee. This is separate from the company income-tax return.
Fees change. Check the live Companies Office incorporation guide before paying.
Do not stop at incorporation
What to set up next
Identity and tax
- Confirm the NZBN and public details
- Activate myIR and the right IRD accounts
- Register for GST at $60,000 taxable turnover or when another rule requires it
- Register as an employer before paying staff
- Use the correct business industry code for ACC
Money and records
- Open a separate business bank account
- Choose bookkeeping and invoice systems
- Set money aside for GST, income tax and ACC
- Keep tax, wage and business records for at least seven years
- Plan provisional tax and filing dates
People and risk
- Use written employment agreements
- Meet health and safety duties
- Check public, professional and asset cover
- Record director and owner decisions
- Review personal guarantees before signing
Name, licences and sales
- Check trade mark rights with IPONZ
- Secure the domain and trading names
- Check council and industry licences
- Use clear customer terms and privacy notices
- Put the correct legal name and NZBN on business records
Common questions
Questions people ask before they register
Do I need to register a company to start trading?+
No. A person can trade as a sole trader without incorporating a company. You still need to tell Inland Revenue, keep records, meet tax rules and get any licences your work needs.
Are an NZBN, company number and IRD number the same?+
No. An NZBN identifies a business when it deals with other firms and government. A company number identifies its Companies Office record. An IRD number identifies it for tax. A new company gets an NZBN, but it still has separate company and tax numbers.
Does registering a company name protect my brand?+
Not by itself. A company name, trading name, domain and trade mark are different rights. Check ONECheck and the IPONZ trade mark register before you spend money on a name.
When must a business register for GST?+
A business must register when taxable turnover was at least $60,000 in the last 12 months, is expected to reach that sum in the next 12 months, or when it adds GST to its prices. Some supplies, such as long-term residential rent, are exempt.
Can I change structure later?+
Yes, but moving assets, contracts, tax balances and staff can create tax and legal work. Plan the change with an accountant and lawyer before transferring anything.
Can someone who lives overseas form a New Zealand company?+
They can hold shares, but every New Zealand company needs at least one director who lives in New Zealand, or who lives in Australia and is also a director of an Australian company. Overseas owners may face more identity, tax and banking checks.
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