{"id":219681,"date":"2023-01-10T11:02:03","date_gmt":"2023-01-09T22:02:03","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=219681"},"modified":"2023-01-11T18:59:15","modified_gmt":"2023-01-11T05:59:15","slug":"how-to-restructure-from-a-sole-trader-business-to-a-company-in-nz","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/startups\/how-to-restructure-from-a-sole-trader-business-to-a-company-in-nz\/","title":{"rendered":"How to Restructure From a Sole Trader Business to a Company in NZ"},"content":{"rendered":"\n

While having a company is typically the best <\/span>structure<\/span><\/a> for a business, some founders may begin their business as a sole trader. Later on, once the business grows, the founders may wish to convert it to a limited company to obtain various benefits. This article will discuss the steps required to restructure from a sole trader business to a company. <\/span><\/p>\n\n\n\n

Set Up a New Company<\/span><\/h2>\n\n\n\n

When restructuring from a sole trader business to a company, you will want to ensure that a new company has been set up and is ready to start trading. You can <\/span>register a company<\/span><\/a> with the Companies Office, which will be ready to start trading and running the business. <\/span><\/p>\n\n\n\n

When setting up your new company, it is important to determine what role any associates or partners will have in the company. You may consider granting existing employees shares in the company to incentivise their performance. Likewise, you may wish to grant any senior employees directorships. However, you should take advice to ensure you appreciate the consequences of these actions. The law grants directors and shareholders significant power to control and influence the company. <\/span><\/p>\n\n\n\n

Transfer of Business<\/span><\/h2>\n\n\n\n

Once the company has been set up, you will need to transfer across any business assets into the ownership of the company. You typically use a business transfer deed to specify the assets transferred to the company. This deed will specify the cost of the transfer of each asset. Typically assets are transferred at fair market value (which may be nominal for early-stage businesses). Before commencing any restructuring, it is important to seek tax and accounting advice to ensure that the transfer of assets from a sole trader to the company does not result in any unforeseen tax implications.<\/span><\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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