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No matter who you are, running a company involves a lot of hard work. If you have previously been a small business owner or contractor, running a company is a significant step up. Likewise, you will have many new responsibilities. To operate legitimately as a company, including selling products, you must register your company with the Companies Office. Therefore, an unregistered company cannot sell products in New Zealand. This article explains how to register your company to sell products and maintain this registration. 

What is a Company?

When you form a company, you create an entity separate from yourself, the company’s owners, managers and shareholders. So, you and your business are not legally the same entity.

This is different to a sole trader, where you are running a business alone or a partnership, where two or more people are running a business.

There are pros and cons to running a company. Primarily, most companies enjoy the concept of ‘limited liability,’ which means that you are not responsible for your company’s debts. As a result, you can protect your assets and are not at personal risk of bankruptcy if the company fails. However, you may be liable if you act recklessly or illegally. 

Additionally, companies often are more credible than sole traders or small businesses. The main reason is that they require much more effort to set up and operate. Unlike operating as a sole trader, where you are the business, a company will also outlast you. Likewise, you can sell your shares or transfer your position in the company to someone else. However, a company costs more to run than a sole trader or small business, as there are more registration and compliance costs.

Alongside limited liability companies, there are also cooperative and unlimited companies, which have significantly different obligations. For example, unlimited companies allow shareholders to be sued from their own assets if the company cannot satisfy a debt.

How Do I Register a Company in New Zealand?

Starting and registering a company in New Zealand is a more straightforward process than in many other countries. However, there are still some legal obligations that you will need to note. 

Since a company is a separate legal entity, you will need to register with the Companies Office to operate legitimately in business. Before you register, you will need to create an online account with the New Zealand Companies Office, create a RealMe login for your company, and reserve a company name. It costs $10 (plus GST) to reserve a name and $115 (plus GST) to register your company.

Additionally, you will need to have a physical address for your company and an email address for correspondence when you register. Finally, you will likely need to apply for an IRD number. 

Corporate Considerations

You will also need to have at least one share, one shareholder and a director for your company. You must note all these details when you register your company. It is essential that you actively keep records of any changes within your company governance. 

You may also want to create a constitution for your company, but this is not essential. If you do not, the rules outlined in the Companies Act 1993 apply. 

Intellectual Property Considerations

Registering your company name gives you the exclusive right to use this name. So, your company name cannot be the same as another New Zealand company. Your company name also cannot contain offensive words or phrases, symbols, or macrons. You may want to make a trade mark application to the Intellectual Property Office (IPONZ) to have your company name and logo trademarked. If you get a registered trade mark, you have legal protection if other people use your company name and logo without your permission.

IPONZ will generally approve your application for your name within two hours. After approval, you have a 20-working day window to complete the rest of the registration process for your company. You can use this time to get the rest of your documentation together.

How Do I Maintain My Company Registration?

All companies in New Zealand must maintain records about their company. These records include:

  • financial statements;
  • a record of shares; and 
  • notes on how the company is managed. 

In addition, the company will need to file annual returns with the Companies Office to prove it is still operating. If you do not file a return and provide the other relevant information, there is a chance that the Office will remove you from the Companies Register. 

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Key Takeaways

An unregistered company cannot sell products in New Zealand. For a company to act legitimately in trade, you must register it with the Companies Office and list it on the Companies Register. Registration is vital because, unlike a sole trader or partnership, a limited liability company is a separate entity from its shareholders, which means they cannot be sued for any of the company’s debts. In New Zealand, getting a company on the register is a reasonably straightforward application process. Your company will also need to make sure that they submit the correct paperwork every year, including an annual return and management update, to ensure that the company remains on the Companies Register. 

If you need help with registering your company, our experienced corporate lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

Can an unregistered company cannot sell products in New Zealand?

No, an unregistered company cannot legally sell products. To operate legitimately as a company, including selling products, you must register your company with the Companies Office.

Are all companies limited liability?

A limited liability company means that the shareholders cannot be held personally liable for any of the company’s debts. Not all companies are limited liability companies. Some company structures have unlimited liability for their shareholders. It is essential to know the distinction between these to know what kind of liability you may be facing for your company’s debts.

What is the difference between a company and a sole trader?

When you operate as a sole trader, you are the business, and the business is you. Likewise, you are liable for all debts and are taxed as an individual. When you form a company, the company is a separate legal entity.

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