Business structures

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Businesses commonly use one of three business structures:

• Sole trader
• Partnership
• Company.

Sole trader

If you’re a sole trader, you’re in complete control of your business. The profits are entirely yours, but so are all the responsibilities and liabilities – including any debts your business incurs.

Becoming a sole trader doesn’t require any legal paperwork, which is why many businesses in New Zealand start off as sole traders.

Find out more with Focus on sole traders.

Partnership

If you’re in a partnership you’ve chosen to pool your assets with others into one business, with the profits and losses of the business divided between you. These types of businesses are established with partnership agreements, which set out in writing the division of profits and losses.

Find out more with Focus on partnerships.

Companies

A company is a business that is a legal entity in its own right, separate from its shareholders.

This is important because the company owns all its assets and liabilities, which means your responsibilities for any debts are generally limited to the amount you’ve invested as share capital in the business.

Every company in New Zealand has to be incorporated – or registered – with the  Companies Office (the national registrar of companies).

Find out more with Focus on companies.

Find out more about Business structures.

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