Total Accounting, Chartered Accountants offer as part of their services assistance to their clients with company incorporation and would be happy to assist you in company incorporation and your subsequent accounting and taxation requirements.

The following Documentation includes the detail we will require to assist in this regard. Read the article below this relating to the Advantages/ Disadvantages of a Company Structure.




Name of Company




Address of Registered Office


Address for Communication


Email Address for Annual Return


Names of Directors

Residential Addresses of Directors

IRD Number













Names of Shareholders

Residential Addresses of Shareholders

IRD Number

Shares per Shareholder


















Total Number of Shares





GST Registration Period

One/ Two/ Six Months


The setting of up a business entity as a company  may not be appropriate and necessary for all business entities for self employed persons and small business firms.  Here are some of the advantages and features and disadvantages of the company structure:


Can have any number of business owners (shareholders) providing varying levels of investment capital and personal services.   A sole trader is limited to one  and a partnership normally will have fewer partners than the business owners of a company.
Provides limited liability,    Claims against the company fall on the company, not the shareholders.    That is there can be a separation of business risk from the shareholders personal assets.    
Registration of the Name,   Once a name is approved by the Registrar of Companies no other company can be registered with an identical or near identical name.    There is no register for unincorporated bodies such as sole traders or partnerships.
Separate legal entity.    An individual can not enter into a contract with himself but a shareholder can enter into a contract with the company.    As a consequence of this a shareholder may be employed by the company and may also loan money to the company on the same basis as any unrelated party.
May offer tax advantages when the tax rates for companies and individuals differ e.g. tax rate for companies is 28c in $, whereas tax rates for individuals differ (to $14000 10.5 c, $14000-$48000 17.5c, $48001-$70000 30c, $70001 and more 3c).  
Taxation and employing Relatives.     By introducing family members as employees and/or as shareholders income splitting is possible to enable tax less tax to be paid at the higher rates.     Approval from the Inland Revenue Department is required to allow a claim for wages paid to a spouse of family of a sole trader or of a partner in a partnership.   Restrictions are placed at the hourly rate which can be paid.     With a company there is no such restriction.    The amount of remuneration paid is to be in keeping with the value of the work undertaken.
Tax-Dividend Imputation.     With the introduction of dividend imputation from the 1st of April, 1988, double taxation has been removed.     Companies now pay tax at 28c in the dollar on any profit earned after allowing for shareholders salaries.      If the company's tax paid profit is later distributed to shareholders as dividend they get an imputation credit for the tax the company has already paid on their behalf.
May confer the impression of greater credibility and that the business is “serious” and there for the long term.
Continuity.     If a director pulls out, or a shareholder wishes to sell part or all of his or her shares, the company is not affected with a new director or shareholder.     This would be different with a sole trader or partnership.     Both of these business forms would have to create a new entity.
Provides more options for funding e.g. raising of equity, venture capital.  
Borrowing.     Arranging security for a loan can be both cheaper and easier for a company than an individual.    A company may grant a floating charge over its assets, both present and future, by the granting of a debenture.     Individuals, on the other hand, cannot do this and must grant specific charges over specific assets.    A company can grant a charge over its undertakings whereas an individual would have to provide a detailed schedule of all assets to be charged for the charge to be effective.    Under the debenture, new assets acquired by the company would automatically be covered by the charge and existing assets sold in the course of the business would be released from the charge.     In the case of an individual where a new asset was acquired a new charge would have  to be prepared.   Similarly where an asset was sold a release would have to be executed to release the asset from the charge.
Security for Shareholders Loan.    It is possible for a shareholder to have their lending to the company secured by way of a debenture.    In the event of the company experiencing financial difficulties, eventuating in a wind up of the company, the debenture holder would stand to rank ahead of the unsecured creditors in distribution of the residual assets.
Easier to sell part of company than a sole trader or partnership business structure- just sell some of the shares.  
Distribution of the Company's Loss Amongst Shareholders.    It is possible to separately register the company with Inland Revenue Department with Look Through Company (LTC).     In the event of the company experiencing a tax loss in a future year, this loss can be distributed to the shareholders (in the same year).     The result is, losses which would otherwise be held within the company, awaiting future profits to offset these losses, can be used immediately by the shareholders to reduce their individual personal tax liabilities.     An example of the use of an LTC company is the purchase of a rental property which is heavily mortgaged or a forestry company from its start up.        In the early years both situations are likely to have losses.   These losses would be able to be distributed year by year to the shareholders-  without LTC status these distributions would not be possible. 



Does not protect you from personal liability as a director.    If it can be shown that you continued trading when the company was insolvent you can be held to be personally liable for the debts of the company.
Directors must be fully aware of the financial operations of the company to prevent it trading while insolvent.
Does not provide any opportunity to spread business income to family members on lower marginal tax rates other than through legitimate wages.
Business losses have to remain in the company (unless the company is a LTC) and cannot be offset against a shareholder’s taxable income from other sources.
A public company has to declare financial results publicly and has to be audited.
Depending on profit levels in first year, may have to start paying income tax earlier than other business structures.


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