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The right structure matters from day one.
Sole trader, partnership, company, or trust? Your choice affects liability, tax, and your ability to grow. Get it right the first time.
Why getting this right matters.
Your business structure isn't just paperwork. It's a decision that shapes your taxes, your personal risk, and your options for the future.
"Changing structure later is expensive and can trigger tax. Getting it right initially saves significant expense."
Liability Protection
The wrong structure can put your personal assets at risk. If your business runs into trouble, your home and savings could be exposed. A company provides separation; a sole trader offers none.
Tax Implications
Companies pay 28% on profits (as at April 2024). Sole traders pay their personal rate (up to 39%). Trusts have their own rules. The right choice depends on your income level and how you plan to use profits.
- Retained earnings vs. drawings
- ACC implications
- Exit and sale scenarios
Growth & Exit
Want to bring in co-owners? Attract investors? Sell the business later? Some structures make this straightforward. Others require expensive restructuring. Plan ahead.
Six paths. One right for you.
Each structure serves a purpose. The right choice depends on your situation, not a one-size-fits-all rule.
Sole Trader
You and the business are the same entity. Simplest to set up and run.
Partnership
Two or more people operating together, sharing profits and responsibilities.
Limited Partnership
A general partner runs the business, with limited partners investing capital and limited liability.
Company
A separate legal entity from its owners. Most common for serious businesses.
Trust
Trusts can own business assets or company shares. Useful for separation and succession.
Joint Venture
Two or more parties collaborate on a defined project while keeping their own businesses separate.
There's no universally "best" structure. What works for one business may not work for another. We help you understand what each option means for your specific situation.
Questions to consider.
Risk Tolerance
Personal exposure
How much personal liability are you comfortable with? Are you taking on work that could expose you to claims?
Ownership
Now and future
Are there multiple owners involved now? Do you expect to bring in partners or investors in the future? Or are you and others joining together for a single project?
Growth Plans
Five year view
What are your plans for the next five years? Staying small, hiring staff, selling, or passing to family?
Financial Planning
Bigger picture
How does your business structure fit with your overall financial planning? Your personal assets?
Industry Context
Sector norms
What's typical in your industry? Some sectors have professional requirements or customer expectations.
Tax Position
Coordinate with accountant
What's your accountant's view? The legal structure must align with your tax planning.
When to restructure.
Many Hawke's Bay business owners come to us at a decision point: Their accountant has mentioned incorporating a company; they want to bring in a partner, or they're taking on work that feels riskier than before.
Your revenue has grown significantly
Tax planning becomes more important at higher income levels.
You are taking on riskier work
Higher-value contracts mean higher exposure.
You want to bring in others
Partners, investors, or family members joining the business, or doing a project with you.
You are thinking about succession
How you'll exit affects what structure makes sense now.
Restructuring costs money.
Changing from sole trader to company, or restructuring ownership, isn't free. There are legal costs, accounting costs, and potentially tax consequences.
That's why getting it right the first time matters, and why, if you do need to restructure, doing it properly matters even more.
Get Advice FirstStructure Advice
We discuss your business, goals, risk factors, and tax position. We explain the options and give you a clear recommendation.
Company Formation
Incorporation, constitution drafting, shareholder agreements; everything you need to start right.
Partnership Agreements
Clear agreements that define responsibilities, profit sharing, and what happens if things change.
Restructuring
When your business has outgrown its structure, we help you transition smoothly with minimum cost and disruption.
What Our Clients Say
"Prompt, friendly & efficient service"
"I have always received excellent service from Carlile Dowling."
"A pleasure to work with."
To ensure candour, all feedback was collected anonymously.
Related Reading
Limitation Periods in New Zealand: Time Limits for Legal Claims
Understanding time limits for legal claims. Covers contract (6 years), tort (6 years), employment (90 days), and when time starts running.
New Zealand Disputes Tribunal: A Complete Guide
Everything you need to know about the Disputes Tribunal. Covers jurisdiction limits, types of disputes, process, costs, and when to use it.
Company vs Trust: Which Structure for Your Business?
Companies and trusts serve different purposes. Understanding when each is appropriate helps you choose the right structure for your situation.
Meet the team
behind your business
Common Questions
We work with businesses of all sizes across Hawke's Bay, from startups and family businesses to established enterprises. Our clients include vineyards, orchards, professional services, hospitality, retail, trades, and many others.
Many business issues require legal advice, even for small businesses. Getting structures and agreements right from the start often prevents costly problems later. We are happy to discuss whether legal help would benefit your situation.
Accountants and lawyers complement each other. Your accountant advises on financial and tax issues. Working alongside your accountant, we handle legal structures, contracts, financing, securities, employment and more.
Any existing documents relevant to your situation: company records, contracts, agreements you are considering, or details of issues you are facing. But if you are just at the thinking stage, that is fine too.
Understanding Your Options
Sole trader, company, partnership, limited partnership, or trust
02Choosing the Right Structure
Matching structure to your goals
03What's Involved
The process of setting up
04Company Obligations
Director duties and company compliance
05Partnership & Trust Compliance
Ongoing requirements for partnerships and trusts
06Planning Ahead
When to restructure, succession, and exit
Ready to discuss your needs? We're here to help.