In good company



In Good CompanyIf sole trading and partnering aren’t your style, a company could be the business structure for you.

As a legal entity, a company is taxed separately from its owners. New Zealand’s 28% company tax rate is significantly lower than the highest personal tax rate of 33%.

The down side is that Companies Act obligations mean more paperwork.

Company directors must act honestly and in good faith for shareholders’ benefit. This isn’t an issue for straight shooters (e.g. most ‘mum-and-dad’ companies).

But take care: directors can be liable if their company trades while insolvent. And liable for company debts if they’ve given ‘personal guarantees’. (We’ll discuss these later.)

Some people think corporate trappings confer credibility. Yet it’s easy to discover a company’s directors and history.

If you combine talent with good faith and good advice, you’ll likely prosper in any business structure you choose!

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