{"id":226486,"date":"2024-05-07T19:03:21","date_gmt":"2024-05-07T06:03:21","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=226486"},"modified":"2024-05-07T19:03:22","modified_gmt":"2024-05-07T06:03:22","slug":"legal-considerations-government-grants-startups","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/startups\/legal-considerations-government-grants-startups\/","title":{"rendered":"5 Legal Considerations for Utilising Government Grants for Your NZ Startup"},"content":{"rendered":"\n<p>Establishing your New Zealand business is an exciting prospect. In particular, <a href=\"https:\/\/legalvision.co.nz\/startups\/grants-startup-funding\/\">various business grants<\/a> offered by the New Zealand Government can help to provide you with essential financial assistance. Such funding is often critical for your business in the early stages of growth. However, taking advantage of the government grants on offer brings with it several legal considerations that you must note. This article will take you through five legal considerations for utilising government grants for your New Zealand startup.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">1. Eligibility Criteria for Government Grants<\/h2>\n\n\n\n<p>You must first understand the <a href=\"https:\/\/legalvision.co.nz\/startups\/pitching-government-grants\/\">eligibility criteria<\/a> for any grants in detail, which will be set out by the grant provider. Importantly, each grant will have unique eligibility requirements regarding the types of businesses that are eligible and what stage of development the business must be in to qualify.<\/p>\n\n\n\n<p>For example, some grants are for businesses operating in certain sectors, while other grants might seek to fund small businesses in their early stages. This means you will need to thoroughly review the eligibility criteria to assess if your startup meets these requirements before applying.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">2. Reporting and Other Compliance Conditions<\/h2>\n\n\n\n<p>Government grants are often granted subject to specific reporting and other compliance conditions. These requirements exist to ensure the proper use of public funds.<\/p>\n\n\n\n<p>As a result, it is essential for startup business owners to familiarise themselves with these requirements to understand their ongoing responsibilities. For example, you may have an obligation to:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>maintain records about how grant funds are used;<\/li>\n\n\n\n<li>lodge progress reports; and\u00a0<\/li>\n\n\n\n<li>comply with any restrictions on the use of funds.<\/li>\n<\/ul>\n\n\n\n<p>Non-compliance will often result in repayment obligations and may trigger legal action for more problematic non-compliance. As a result, you need to develop systems for monitoring and reporting.<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar 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Intellectual Property<\/h2>\n\n\n\n<p>Intellectual property (IP) considerations are essential for startups. This is especially the case if your business is engaged in innovative industries. When utilising government grants for research and development projects, you must manage your IP rights carefully and ensure clarity as to ownership of developed IP. For example, discussing and clarifying ownership rights and commercialisation is essential. Once these rights have been discussed, you should seek legal advice to implement comprehensive IP protections and implement IP agreements that address:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ownership;\u00a0<\/li>\n\n\n\n<li>confidentiality; and\u00a0<\/li>\n\n\n\n<li>the commercialisation of innovations developed using grant funding.\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n<p>Failure to consider these issues may lead to disputes and prevent your startup from maintaining its uniqueness from competitors.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">4. Tax Implications<\/h2>\n\n\n\n<p>Government grants may have unique tax implications for startups. However, this will ultimately depend on how the funds are structured and utilised. While grants are not ordinarily taxable, the way they are used and the activities they fund may have tax consequences.<\/p>\n\n\n\n<p>For example, consider a grant fund used to purchase assets. In that case, startups may be eligible for tax incentives. On the other hand, if grant funds are used for revenue-generating activities, they may be subject to taxation.<\/p>\n\n\n\n<p>It is recommended that you consult with tax professionals to minimise tax liabilities and understand any implications of the specific government grant being applied for.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">5. Anti-Discrimination Laws<\/h2>\n\n\n\n<p>Businesses are required to comply with <a href=\"https:\/\/legalvision.co.nz\/employment\/employment-discrimination\/\">anti-discrimination laws<\/a> in many countries, including New Zealand.<\/p>\n\n\n\n<p>These laws effectively prohibit discrimination based on various protected characteristics, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>race;<\/li>\n\n\n\n<li>age;\u00a0<\/li>\n\n\n\n<li>gender;\u00a0<\/li>\n\n\n\n<li>physical abilities; and\u00a0<\/li>\n\n\n\n<li>sexual orientation.<\/li>\n<\/ul>\n\n\n\n<p>While all startups should ensure that their hiring practices and workplace policies comply with anti-discrimination laws, this is particularly important for businesses utilising government grants. This is because anti-discrimination is likely to be a key focus and critical criterion for all government organisations.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2021\/10\/21140438\/NZ-Startup-Manual-251x360-2.png\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">NZ Startup Manual: A Legal Handbook For Founders<\/div>\n            <div class=\"body-text\">\n                <p>Essential reading for anyone building their startup. This free guide includes practical advice and seven real-life case studies.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/NZ-Startup-Manual.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways&nbsp;<\/h2>\n\n\n\n<p>Government grants can help make starting your new business a reality. However, taking advantage of the grants on offer brings with it several legal considerations. You must carefully consider these requirements and ensure compliance with them. Some legal considerations for utilising government grants for your New Zealand startup include:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>eligibility criteria;\u00a0<\/li>\n\n\n\n<li>conditions of grant;<\/li>\n\n\n\n<li>intellectual property;<\/li>\n\n\n\n<li>tax implications; and<\/li>\n\n\n\n<li>anti-discrimination laws.<\/li>\n<\/ul>\n\n\n\n<p>If you need assistance navigating the legal requirements associated with government funding for your New Zealand start up, you can contact our experienced <a href=\"https:\/\/legalvision.co.nz\/startup-lawyers-lp\">startup lawyers<\/a> to assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today at <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or visit our <a href=\"https:\/\/legalvision.co.nz\/membership\/\">membership page<\/a>.&nbsp;<\/p>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"ed19fd34f0\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/226486\" \/>            <input value=\"https:\/\/legalvision.co.nz\/startups\/legal-considerations-government-grants-startups\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"5 Legal Considerations for Utilising Government Grants for Your NZ Startup\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Establishing your New Zealand business is an exciting prospect. In particular, various business grants offered by the New Zealand Government can help to provide you with essential financial assistance. Such funding is often critical for your business in the early stages of growth. However, taking advantage of the government grants on offer brings with it<a href=\"https:\/\/legalvision.co.nz\/startups\/legal-considerations-government-grants-startups\/\">Continue reading <span class=\"sr-only\">&#8220;5 Legal Considerations for Utilising Government Grants for Your NZ Startup&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13267,"featured_media":215571,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"220316,224985,225775,226098,225532,212831","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[10],"tags":[24,2177,2178,2179],"class_list":["post-226486","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startups","tag-startup","tag-government-grant","tag-government-compliance","tag-startup-grants"],"acf":[],"yoast_head":"<!-- This site is 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