{"id":212992,"date":"2021-12-20T18:08:07","date_gmt":"2021-12-20T05:08:07","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=212992"},"modified":"2021-12-20T18:08:08","modified_gmt":"2021-12-20T05:08:08","slug":"register-online-business-as-a-company","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/register-online-business-as-a-company\/","title":{"rendered":"Do I Need to Register My Online Business as a Company in New Zealand?"},"content":{"rendered":"

Running an online business<\/span><\/a> is a fantastic way to work from the comfort of your own home. You may sell goods or services on a website or through a ready-built platform for online trading like Trade Me. Alternatively, more businesses are turning to social media applications like Instagram. An online business gives you tremendous freedom to sell goods whenever and to whoever, no matter the time or physical location. Instead of having a <\/span>physical store<\/span><\/a> with set opening hours, you can sell your products whenever someone logs onto your trading forum, even if they are not in close physical distance to you.\u00a0<\/span><\/p>\n

Even though your business may exist in cyberspace, you will need to comply with New Zealand law. This article will first outline the different ways your online business can operate. If you decide that your business is best suited to being run as a company, then read on to see how to register your online business to make sure that you are operating legally in New Zealand.\u00a0<\/span><\/p>\n

What Is a Company?<\/span><\/h2>\n

When you create a business, you may be operating as a\u00a0<\/span>sole trader, partnership, or company<\/span><\/a>. A sole trader is when you and the business are the same legal entity. You are the business, and the business is you. Alternatively, when you operate under a partnership, multiple people run the business together. You are all technically the business, but often partnerships are legally recorded and finalised.\u00a0<\/span><\/p>\n

A company works slightly differently from a sole trader or a partnership. A company is an entity that is separate from anyone involved in the business. Legally, a company is its own entity. This is why companies are sometimes referred to as <\/span>limited liability companies<\/span><\/a>. To understand this term, suppose a limited liability company finds itself with large amounts of business debts. In this case, third-party creditors cannot personally sue the company\u2019s directors to pay off the company\u2019s debts. As such, when running a company, your personal assets are protected. This is one of the key benefits of structuring your business as a company.\u00a0<\/span><\/p>\n

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Additionally, this means a company can outlast you as an individual, as you can sell your shares or transfer the company. This structure differs from a sole trader business or partnership, where \u2018you\u2019 are technically the business or a significant part of it. You are taxed as an individual and are responsible for all the business\u2019s debts.\u00a0<\/span><\/p>\n<\/div>\n

Most companies are limited liability companies. However, some companies are unlimited or cooperative companies. Co-operatives are also limited liability companies. Generally, people form co-operatives to provide goods or services to their members who own and control the business. Unlimited companies do not limit a shareholder\u2019s liability for company debts and are, therefore, rare.<\/span><\/p>\n

Do I Need to Register My Online Business as a Company?<\/span><\/h2>\n

Once you understand how the different business structures work, it is up to you which one you want to run your online business. If you decide that you would like to operate your new business as a company, the next step is to complete some paperwork to ensure that your company is registered. This is because a company is the only business type that is its own legal entity. So, there is a formal registration process.\u00a0<\/span><\/p>\n

You will have different legal obligations if you are operating as a sole trader or a partnership. However, you will not have to register your online business the same way as a company. Keep in mind, though, that you may need to <\/span>register for different licenses<\/span><\/a> if you operate a business with food or alcohol. Often, this is dependent on your council\u2019s regulations. Therefore, it is crucial to research what you may need to register for based on your location.\u00a0<\/span><\/p>\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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